Cramer: Southwest worth every penny

Southwest's monumental Q4
Southwest's monumental Q4   

Southwest Airlines' latest earnings report reflects the company's handling of oil's price plunge and its fuel hedging, according to CNBC's Jim Cramer.

"Remember, they never lost money [last quarter]," Cramer said on CNBC's "Squawk on the Street" on Thursday. "This is domestic strength."

Read More Delta Air Lines posts loss after fuel hedging, upbeat on new year

Cramer made his remarks following the company's latest earnings report. Southwest surpassed expectations after posting fourth-quarter adjusted earnings of 59 cents per share versus an EPS estimate of 55 cents. Revenue also increased to $4.63 billion, up from $4.43 billion a year ago.

"[Southwest is] worth every penny," Cramer said. "Southwest is very well hedged, unlike [American Airlines]." Cramer added other airlines, including United Continental Holdings, lost money due to fuel hedging.

DISCLOSURE: When this story was published, Cramer's charitable trust did not own any of the stocks mentioned in this story.

Disclaimer

—Jacob Pramuk contributed to this report