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Southern Company (SO) Q2 Earnings Beat on Retail Strength

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Power supplier Southern Company (SO - Free Report) reported second-quarter 2018 earnings per share (excluding certain one-time items) of 80 cents, above the Zacks Consensus Estimate of 69 cents and the year-ago profit of 73 cents.

The outperformance stemmed from favorable regulatory results, strength of its retail unit and success of the company’s Southern Power renewable portfolio. These positives were partly offset by increase in operations and maintenance cost as well as by a charge associated with the construction of the Vogtle nuclear plant.

The Atlanta-based utility’s quarterly revenue – at $5,627 million – came 3.6% higher than the second-quarter 2017 sales of $5,430 million and also beat the Zacks Consensus Estimate of $5,230 million.

Southern Company (The) Price, Consensus and EPS Surprise

 

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

Overall Sales Breakup

Southern Company’s wholesale power sales increased 2.7%, 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 second quarter was up 2.2% from the same period last year.

Southern Company’s total retail sales improved 2%, with residential, industrial and commercial sales edging up by 5%, 0.6% and 0.8%, respectively.

Expenses Summary

The power supplier’s operations and maintenance cost increased 15% to $1,559 million but the utility’s total operating expense for the period – at $5,564 million – was down 21.4% 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 Corporation (EXC - Free Report) and Duke Energy Corporation (DUK - Free Report) – currently retains a Zacks Rank #3 (Hold).

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

NRG Energy Inc. is engaged in the production, sale and delivery of energy and energy products and services to residential, industrial and commercial consumers in major competitive power markets in the United States. In the last 30 days, three earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings has risen 13% in the same period.

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