Power supplier The Southern Company (SO - Free Report) reported third-quarter 2022 earnings per share (excluding certain one-time items) of $1.31, lagging the Zacks Consensus Estimate of $1.33. The underperformance reflects a spike in operations and maintenance cost.
However, SO’s bottom line was above the year-earlier quarter’s adjusted profit of $1.23 per share, backed by the positive effects of rates, usage and pricing changes, plus a demand boost from favorable weather.
The utility reported revenues of $8.4 billion. The top line beat the Zacks Consensus Estimate of $6.8 billion and was 34.3% higher than third-quarter 2021 sales.
The firm is guiding for earnings per share toward the upper end of its guidance of $3.50-$3.60 this year.
Overall Sales Breakup
Southern Company’s wholesale power sales jumped 10.4%, which was complemented by a rise in retail electricity demand.
Overall, there was an upward movement in overall electricity sales and usage. In fact, total electricity sales during the third quarter were up 4.6% from the same period last year.
Southern Company’s total retail sales moved up 2.6%, with residential, industrial and commercial sales increasing 2.9%, 2.2% and 2.7%, respectively.
Expenses Summary
The power supplier’s operations and maintenance cost rose 7% year over year to $1.5 billion, while the utility’s total operating expense for the period — at $6.2 billion — was up 37% from the prior-year level.
Zacks Rank & Stock Picks
Southern Company carries a Zacks Rank #3 (Hold).
Meanwhile, investors interested in the utility space could look at better options like American Electric Power (AEP - Free Report) , American Water Works Company (AWK - Free Report) and NextEra Energy (NEE - Free Report) . All the firms carry a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
American Electric Power: American Electric Power is valued at around $44.9 billion. For 2022, AEP has a projected earnings growth rate of 6.1%.
American Electric Power delivered a four-quarter average earnings surprise of 2%. Headquartered in Columbus, OH, AEP shares have gained 2.9% in a year.
American Water Works Company: American Water Works is valued at around $25.3 billion. For 2022, AWK has a projected earnings growth rate of 4.5%.
American Water Works delivered a four-quarter average earnings surprise of 5.2%. Headquartered in Camden, NJ, AWK shares have lost 19% in a year.
NextEra Energy, Inc.: NextEra Energy is valued at around $148.5 billion. For 2022, NEE has a projected earnings growth rate of 13.3%.
NextEra Energy delivered a four-quarter average earnings surprise of 5.5%. Headquartered in Juno Beach, FL, NEE shares have lost 12.6% in a year.
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Power supplier The Southern Company (SO - Free Report) reported third-quarter 2022 earnings per share (excluding certain one-time items) of $1.31, lagging the Zacks Consensus Estimate of $1.33. The underperformance reflects a spike in operations and maintenance cost.
However, SO’s bottom line was above the year-earlier quarter’s adjusted profit of $1.23 per share, backed by the positive effects of rates, usage and pricing changes, plus a demand boost from favorable weather.
The utility reported revenues of $8.4 billion. The top line beat the Zacks Consensus Estimate of $6.8 billion and was 34.3% higher than third-quarter 2021 sales.
The firm is guiding for earnings per share toward the upper end of its guidance of $3.50-$3.60 this year.
Overall Sales Breakup
Southern Company’s wholesale power sales jumped 10.4%, which was complemented by a rise in retail electricity demand.
Overall, there was an upward movement in overall electricity sales and usage. In fact, total electricity sales during the third quarter were up 4.6% from the same period last year.
Southern Company’s total retail sales moved up 2.6%, with residential, industrial and commercial sales increasing 2.9%, 2.2% and 2.7%, respectively.
Expenses Summary
The power supplier’s operations and maintenance cost rose 7% year over year to $1.5 billion, while the utility’s total operating expense for the period — at $6.2 billion — was up 37% from the prior-year level.
Zacks Rank & Stock Picks
Southern Company carries a Zacks Rank #3 (Hold).
Meanwhile, investors interested in the utility space could look at better options like American Electric Power (AEP - Free Report) , American Water Works Company (AWK - Free Report) and NextEra Energy (NEE - Free Report) . All the firms carry a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
American Electric Power: American Electric Power is valued at around $44.9 billion. For 2022, AEP has a projected earnings growth rate of 6.1%.
American Electric Power delivered a four-quarter average earnings surprise of 2%. Headquartered in Columbus, OH, AEP shares have gained 2.9% in a year.
American Water Works Company: American Water Works is valued at around $25.3 billion. For 2022, AWK has a projected earnings growth rate of 4.5%.
American Water Works delivered a four-quarter average earnings surprise of 5.2%. Headquartered in Camden, NJ, AWK shares have lost 19% in a year.
NextEra Energy, Inc.: NextEra Energy is valued at around $148.5 billion. For 2022, NEE has a projected earnings growth rate of 13.3%.
NextEra Energy delivered a four-quarter average earnings surprise of 5.5%. Headquartered in Juno Beach, FL, NEE shares have lost 12.6% in a year.
4 Oil Stocks with Massive Upsides
Global demand for oil is through the roof... and oil producers are struggling to keep up. So even though oil prices are well off their recent highs, you can expect big profits from the companies that supply the world with "black gold."
Zacks Investment Research has just released an urgent special report to help you bank on this trend.
In Oil Market on Fire, you'll discover 4 unexpected oil and gas stocks positioned for big gains in the coming weeks and months. You don't want to miss these recommendations.
Download your free report now to see them.
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