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Retail Sales Helps Southern Company (SO) Top Q4 Earnings

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Power supplier Southern Company (SO - Free Report) reported fourth-quarter 2017 earnings per share (excluding certain one-time items) of 51 cents, above the Zacks Consensus Estimate of 46 cents and the year-ago profit of 30 cents. The outperformance stemmed from strength of its retail unit and lower operations and maintenance costs.

The Atlanta-based utility’s quarterly revenue – at $5,629 million – came higher than the fourth-quarter 2016 sales of $5,181 million and also beat the Zacks Consensus Estimate of $5,408 million.

Overall Sales Breakup

Southern Company’s wholesale power sales jumped 36.4%, while retail electricity demand strengthened amid favorable weather conditions. This brought about an upward movement in overall electricity sales and usage. In fact, total electricity sales during the fourth quarter was up 10.5% from the same period last year.

Southern Company’s total retail sales improved 4.1%, with residential, industrial and commercial sales up by 8.6%, 3.5% and 0.9%, respectively.

Southern Company (The) Price, Consensus and EPS Surprise

 

Southern Company (The) Price, Consensus and EPS Surprise | Southern Company (The) Quote

Expenses Summary

Southern Company’s operations and maintenance cost decreased 3.6% to $1,565 million but the utility’s total operating expense for the period – at $4,835 million – was up 5.2% 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 - Free Report) and Duke Energy Corp. (DUK - Free Report) –  currently retains a Zacks Rank #4 (Sell).

A better-ranked player from the same industry would be CenterPoint Energy, Inc. (CNP - Free Report) that sports a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CenterPoint Energy, based in Houston, TX, is a domestic energy delivery company that provides electric transmission & distribution, natural gas distribution and competitive natural gas sales and services operations.

The 2017 Zacks Consensus Estimate for this utility is $1.33, representing some 14.7% earnings per share growth over 2016. This year’s average forecast is $1.48, pointing to another 11.6% growth.

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