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Southern (SO) Q2 Earnings Beat on Rates, Usage & Warm Weather

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Power supplier The Southern Company (SO - Free Report) reported second-quarter 2022 earnings per share (excluding certain one-time items) of $1.07, 23 cents ahead of the Zacks Consensus Estimate as well as the year-ago quarter’s adjusted profit. The outperformance primarily stemmed from the positive effects of rates, usage and pricing changes, plus demand boost from warmer-than-normal weather.

The utility reported revenues of $7.2 billion. This beat the Zacks Consensus Estimate of $5.6 billion and was 38.6% higher than second-quarter 2021 sales.

The firm is guiding for earnings per share of $3.50-$3.60 this year and $1.32 for the September quarter.

 

Southern Company The Price, Consensus and EPS Surprise

Southern Company The Price, Consensus and EPS Surprise

Southern Company The price-consensus-eps-surprise-chart | Southern Company The Quote

 

Vogtle Updates

Per Southern Company’s latest earnings presentation, it expects to maintain the timelines to complete the Units 3 and 4 of the Vogtle nuclear project. The utility’s in-service dates for the facilities are Q1’23 (unit 3) and Q4’23 (unit 4). However, Southern Company increased the share of its Georgia Power subsidiary in capital costs for the units by $52 million.

Overall Sales Breakup

Southern Company’s wholesale power sales jumped 27.3%, 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 second quarter were up 12% from the same period last year.

Southern Company’s total retail sales moved up 7%, with residential, industrial and commercial sales increasing 11.3%, 3.7% and 6.5%, respectively.

Expenses Summary

The power supplier’s operations and maintenance cost rose 8.3% year-over-year to $1.6 billion, while the utility’s total operating expense for the period — at $5.6 billion — was up 23.6% 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) , Atmos Energy Corporation (ATO - Free Report) and NextEra Energy, Inc. (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 $49.5 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 around 8.2% in a year.

Atmos Energy Corporation: Atmos Energy is valued at around $16.2 billion. For fiscal 2022, ATO has a projected earnings growth rate of 8.2%.

Atmos Energy delivered a four-quarter average earnings surprise of 1.1%. Headquartered in Dallas, TX, ATO shares have gained around 16.1% in a year.

NextEra Energy, Inc.: NextEra Energy is valued at around $157.9 billion. For 2022, NEE has a projected earnings growth rate of 12.6%.

NextEra Energy delivered a four-quarter average earnings surprise of 5.5%. Headquartered in Juno Beach, FL, NEE shares have gained around 3.2% in a year.