Wall Street investors punished Southwest for chopping its 2025 profit outlook by up to 65%, as the carrier’s executives implement changes driven by its activist investor.

Southwest Airlines Co. plunged after the carrier said it expects economic turmoil to wipe out as much as $1 billion of its annual pre-tax profit this year and offered shareholders a much-reduced outlook for the balance of 2025.

Southwest Airlines on Wednesday posted second-quarter earnings and revenue that fell short of Wall Street's estimates but said demand has stabilized.