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Southern (SO) Beats on Q2 Earnings, Maintains Vogtle Timeline
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Power supplier The Southern Company (SO - Free Report) reported second-quarter 2023 earnings per share (excluding certain one-time items) of 79 cents, beating the Zacks Consensus Estimate of 74 cents. The outperformance primarily reflects lower-than-expected operating expenses.
However, SO’s bottom line was lower than the year-earlier quarter’s adjusted profit of $1.07 per share, affected by tepid demand on the back of unfavorable weather, to go with the negative effects of rates, usage and pricing changes.
The utility reported revenues of $5.7 billion. The top line missed the Zacks Consensus Estimate of $6.8 billion and came in 20.2% lower than second-quarter 2022 sales.
The firm guided earnings per share of $3.55-$3.65 for this year and $1.30 for the September quarter.
Southern Company (The) Price, Consensus and EPS Surprise
While Unit 3 of the Vogtle nuclear project started commercial operation on Jul 31, per the latest earnings presentation, Southern Company expects no further delays in completing Unit 4. The utility’s in-service date for the facility is still late fourth-quarter 2023 to first-quarter 2024. At the same time, Southern Company kept the share of its Georgia Power subsidiary in capital costs for the units unchanged.
Overall Sales Breakup
Southern Company’s wholesale power sales were down 9.9%, which was further compounded by a drop in retail electricity demand.
Overall, there was a downward movement in overall electricity sales and usage. In fact, total electricity sales during the second quarter declined 6.9% from the same period last year.
Southern Company’s total retail sales moved down 5.7%, with residential, commercial and industrial sales decreasing 11.3%, 3.4% and 2.4%, respectively.
Expenses Summary
The power supplier’s operations and maintenance cost fell 3.8% year over year to $1.5 billion, while the utility’s total operating expense for the period — at $4.5 billion — was down 19.7% from the prior-year level and also came below our estimate of $5.2 billion.
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 NiSource Inc. (NI - Free Report) , Portland General Electric Company (POR - Free Report) and MYR Group Inc. (MYRG - Free Report) . Each of the firms carries a Zacks Rank #2 (Buy).
NiSource: NiSource is valued at around $11 billion. For 2023, NI has a projected earnings growth rate of 8.2%.
NiSource’s expected EPS growth rate for three to five years is currently 7%, which compares favorably with the industry's growth rate of 6.4%. Headquartered in Merrillville, IN, NI shares have lost 17.7% in a year.
Portland General Electric Company: Portland General Electric is valued at around $4.6 billion. For 2023, POR has a projected sales growth rate of 8.9%.
Portland General Electric delivered a four-quarter average earnings surprise of 4.2%. Headquartered in Portland, OR, POR shares have lost 20.2% in a year.
MYR Group Inc. MYR Group is valued at around $2.4 billion. For 2023, MYRG has a projected earnings growth rate of 19.4%.
MYR Group delivered a four-quarter average earnings surprise of 16.2%. Headquartered in Thornton, CO, MYRG shares have gained 46.8% in a year.
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Southern (SO) Beats on Q2 Earnings, Maintains Vogtle Timeline
Power supplier The Southern Company (SO - Free Report) reported second-quarter 2023 earnings per share (excluding certain one-time items) of 79 cents, beating the Zacks Consensus Estimate of 74 cents. The outperformance primarily reflects lower-than-expected operating expenses.
However, SO’s bottom line was lower than the year-earlier quarter’s adjusted profit of $1.07 per share, affected by tepid demand on the back of unfavorable weather, to go with the negative effects of rates, usage and pricing changes.
The utility reported revenues of $5.7 billion. The top line missed the Zacks Consensus Estimate of $6.8 billion and came in 20.2% lower than second-quarter 2022 sales.
The firm guided earnings per share of $3.55-$3.65 for this year and $1.30 for the September quarter.
Southern Company (The) Price, Consensus and EPS Surprise
Southern Company (The) price-consensus-eps-surprise-chart | Southern Company (The) Quote
Vogtle Updates
While Unit 3 of the Vogtle nuclear project started commercial operation on Jul 31, per the latest earnings presentation, Southern Company expects no further delays in completing Unit 4. The utility’s in-service date for the facility is still late fourth-quarter 2023 to first-quarter 2024. At the same time, Southern Company kept the share of its Georgia Power subsidiary in capital costs for the units unchanged.
Overall Sales Breakup
Southern Company’s wholesale power sales were down 9.9%, which was further compounded by a drop in retail electricity demand.
Overall, there was a downward movement in overall electricity sales and usage. In fact, total electricity sales during the second quarter declined 6.9% from the same period last year.
Southern Company’s total retail sales moved down 5.7%, with residential, commercial and industrial sales decreasing 11.3%, 3.4% and 2.4%, respectively.
Expenses Summary
The power supplier’s operations and maintenance cost fell 3.8% year over year to $1.5 billion, while the utility’s total operating expense for the period — at $4.5 billion — was down 19.7% from the prior-year level and also came below our estimate of $5.2 billion.
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 NiSource Inc. (NI - Free Report) , Portland General Electric Company (POR - Free Report) and MYR Group Inc. (MYRG - Free Report) . Each of the firms carries a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
NiSource: NiSource is valued at around $11 billion. For 2023, NI has a projected earnings growth rate of 8.2%.
NiSource’s expected EPS growth rate for three to five years is currently 7%, which compares favorably with the industry's growth rate of 6.4%. Headquartered in Merrillville, IN, NI shares have lost 17.7% in a year.
Portland General Electric Company: Portland General Electric is valued at around $4.6 billion. For 2023, POR has a projected sales growth rate of 8.9%.
Portland General Electric delivered a four-quarter average earnings surprise of 4.2%. Headquartered in Portland, OR, POR shares have lost 20.2% in a year.
MYR Group Inc. MYR Group is valued at around $2.4 billion. For 2023, MYRG has a projected earnings growth rate of 19.4%.
MYR Group delivered a four-quarter average earnings surprise of 16.2%. Headquartered in Thornton, CO, MYRG shares have gained 46.8% in a year.