Southwest Airlines reported a third-quarter net loss on Thursday on charges for its employee buyout program and the shrinking value of its fuel hedge portfolio.

The U.S. discount carrier said its net loss had narrowed to $16 million, or 2 cents per share, from $120 million, or 16 cents per share, a year earlier.

During the quarter, Southwest recorded charges of $27 million for the buyout program and $12 million for a portion of its fuel hedge portfolio.

Excluding these one-time items, the airline reported a profit of 3 cents per share.

Revenue for the third quarter fell 7.8 percent to $2.7 billion.

(Reporting by Deepa Seetharaman; Editing by Lisa Von Ahn)