Power supplier Southern Company (SO Quick QuoteSO - Free Report) reported second-quarter 2016 earnings per share (excluding certain one-time items) of 74 cents, ahead of the Zacks Consensus Estimate of 69 cents and higher than the year-ago adjusted profit of 71 cents.

The strong numbers can be attributed to robust performance from its wholesale unit.

The Atlanta-based utility’s quarterly revenue – at $4,453 million – came 2.7% higher than the second-quarter 2015 level of $4,337 million but fell just short of the Zacks Consensus Estimate of $4,461 million amid a dip in retail sales.

Overall Sales Breakup

While wholesale sales increased 4.4%, this was partly offset by a decline in Southern Company’s retail electricity demand mild weather conditions. This brought about a slight downward movement in overall electricity sales and usage. Total electricity sales during the second quarter edged down 0.6% from the same period last year.

Southern Company’s total retail sales fell 1.6%, with residential, commercial and industrial sales down by 0.2%, 1.9% and 1.9%, respectively.

Expenses Summary

Southern Company’s operations and maintenance cost remained essentially flat at $1,099 million, while the utility’s total operating expense for the period – at $3,227 million – was also literally unchanged from the prior-year level.

Zacks Rank & Stock Picks

Southern Company – one of the largest generators of electricity in the nation along with the likes of Exelon Corp. (EXC Quick QuoteEXC - Free Report) and Duke Energy Corp. (DUK Quick QuoteDUK - Free Report) –  currently retains a Zacks Rank #3 (Hold).

A better-ranked player from the same industry would be DTE Energy Co. (DTE Quick QuoteDTE - Free Report) . This Zacks Rank #2 (Buy) stock offers good value and is worth buying now.

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