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Southern (SO) Q1 Earnings Beat on Lower Operating Expense
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Power supplier The Southern Company (SO - Free Report) reported first-quarter 2024 earnings per share (excluding certain one-time items) of $1.03, ahead of the Zacks Consensus Estimate of 90 cents and significantly above the year-ago adjusted profit of 79 cents. The outperformance reflects lower-than-expected operating expenses to go with the positive effects of weather, rates, usage and pricing changes.
Meanwhile, the utility reported revenues of $6.6 billion. The top line came in 2.6% higher than first-quarter 2023 sales but missed the Zacks Consensus Estimate of $7 billion primarily due to a drop in overall electricity sales.
The firm guided earnings per share of $3.95-$4.05 for this year and 90 cents for the June quarter. Further, Southern Company management stuck to its long-term EPS growth rate projection of 5-7% based on the 2024 adjusted EPS projection.
Southern Company (The) Price, Consensus and EPS Surprise
Southern Company successfully completed Units 3 and 4 of the Vogtle nuclear project, which is now the largest generator of clean energy in the United States.
Overall Sales Breakup
Southern Company’s wholesale power sales were down 15.5% though there was a gain in retail electricity demand.
Overall, there was a slight downward movement in overall electricity sales and usage. In fact, total electricity sales during the first quarter edged down 0.4% from the same period last year.
Southern Company’s total retail sales moved up 5.6%, with residential, commercial and industrial sales increasing 11.7%, 5.4% and 0.4%, respectively.
Expenses Summary
The Zacks Rank #3 (Hold) power supplier’s operations and maintenance (O&M) cost rose 2.2% year over year to $1.5 billion.
However, the utility’s total operating expense for the period — at $4.9 billion — was down 6.1% from the prior-year level and came below our estimate of $5.6 billion.
While we have discussed SO’s first-quarter results in detail, let’s see how some other utilities have fared this earnings season.
PPL Corporation (PPL - Free Report) reported first-quarter 2024 operating EPS of 54 cents, which surpassed the Zacks Consensus Estimate of 52 cents by 3.8%. The bottom line increased 412.5% from the year-ago quarter’s figure of 48 cents.
PPL’s total operating expenses were $1.76 billion, down 8.3% from the year-ago quarter’s $1.92 billion. This decrease was due to a fall in energy purchase expenses and taxes other than income tax. Meanwhile, PPL reiterated its projection for capital expenditure for 2024 to 2027 at $14.3 billion. The utility plans to invest $3 billion in 2024 to strengthen its infrastructure.
American Water Works Company (AWK - Free Report) posted first-quarter 2024 operating EPS of 95 cents, which lagged the Zacks Consensus Estimate of 99 cents by 4.1%. However, the bottom line improved 4.4% from the year-ago quarter's earnings of 91 cents. The year-over-year improvement in earnings was due to the favorable impacts of the implementation of new rates in Regulated businesses, offset somewhat by increased production and employee-related costs, and higher financing costs to fund the capital investment plans.
American Water reaffirmed its 2024 EPS guidance in the range of $5.20-$5.30 and reiterated long-term earnings and dividend growth in the range of 7-9%. AWK plans to invest nearly $3.1 billion across its footprint in 2024.
IDACORP, Inc. (IDA - Free Report) reported first-quarter 2024 earnings of 95 cents per share, which lagged the Zacks Consensus Estimate by 6.9%. The company had reported earnings of $1.11 in the year-ago quarter. Customer growth in IDACORP's service areas increased 2.5% year over year for the 12 months ended Mar 31, 2024. This, in turn, boosted operating income by $4.7 million from the year-ago level.
IDACORP reaffirms its 2024 earnings guidance in the range of $5.25-$5.45 per share. It projects capital expenditure in the range of $925-$975 million. Management expects to add more hydropower in 2024 than its previous expectation. IDA now expects to add in the range of 6.5-8.0 MWh in 2024, up from the prior expected range of 5.5-7.5 MWh.
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Southern (SO) Q1 Earnings Beat on Lower Operating Expense
Power supplier The Southern Company (SO - Free Report) reported first-quarter 2024 earnings per share (excluding certain one-time items) of $1.03, ahead of the Zacks Consensus Estimate of 90 cents and significantly above the year-ago adjusted profit of 79 cents. The outperformance reflects lower-than-expected operating expenses to go with the positive effects of weather, rates, usage and pricing changes.
Meanwhile, the utility reported revenues of $6.6 billion. The top line came in 2.6% higher than first-quarter 2023 sales but missed the Zacks Consensus Estimate of $7 billion primarily due to a drop in overall electricity sales.
The firm guided earnings per share of $3.95-$4.05 for this year and 90 cents for the June quarter. Further, Southern Company management stuck to its long-term EPS growth rate projection of 5-7% based on the 2024 adjusted EPS projection.
Southern Company (The) Price, Consensus and EPS Surprise
Southern Company (The) price-consensus-eps-surprise-chart | Southern Company (The) Quote
Vogtle Updates
Southern Company successfully completed Units 3 and 4 of the Vogtle nuclear project, which is now the largest generator of clean energy in the United States.
Overall Sales Breakup
Southern Company’s wholesale power sales were down 15.5% though there was a gain in retail electricity demand.
Overall, there was a slight downward movement in overall electricity sales and usage. In fact, total electricity sales during the first quarter edged down 0.4% from the same period last year.
Southern Company’s total retail sales moved up 5.6%, with residential, commercial and industrial sales increasing 11.7%, 5.4% and 0.4%, respectively.
Expenses Summary
The Zacks Rank #3 (Hold) power supplier’s operations and maintenance (O&M) cost rose 2.2% year over year to $1.5 billion.
However, the utility’s total operating expense for the period — at $4.9 billion — was down 6.1% from the prior-year level and came below our estimate of $5.6 billion.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some Key Utility Earnings
While we have discussed SO’s first-quarter results in detail, let’s see how some other utilities have fared this earnings season.
PPL Corporation (PPL - Free Report) reported first-quarter 2024 operating EPS of 54 cents, which surpassed the Zacks Consensus Estimate of 52 cents by 3.8%. The bottom line increased 412.5% from the year-ago quarter’s figure of 48 cents.
PPL’s total operating expenses were $1.76 billion, down 8.3% from the year-ago quarter’s $1.92 billion. This decrease was due to a fall in energy purchase expenses and taxes other than income tax. Meanwhile, PPL reiterated its projection for capital expenditure for 2024 to 2027 at $14.3 billion. The utility plans to invest $3 billion in 2024 to strengthen its infrastructure.
American Water Works Company (AWK - Free Report) posted first-quarter 2024 operating EPS of 95 cents, which lagged the Zacks Consensus Estimate of 99 cents by 4.1%. However, the bottom line improved 4.4% from the year-ago quarter's earnings of 91 cents. The year-over-year improvement in earnings was due to the favorable impacts of the implementation of new rates in Regulated businesses, offset somewhat by increased production and employee-related costs, and higher financing costs to fund the capital investment plans.
American Water reaffirmed its 2024 EPS guidance in the range of $5.20-$5.30 and reiterated long-term earnings and dividend growth in the range of 7-9%. AWK plans to invest nearly $3.1 billion across its footprint in 2024.
IDACORP, Inc. (IDA - Free Report) reported first-quarter 2024 earnings of 95 cents per share, which lagged the Zacks Consensus Estimate by 6.9%. The company had reported earnings of $1.11 in the year-ago quarter. Customer growth in IDACORP's service areas increased 2.5% year over year for the 12 months ended Mar 31, 2024. This, in turn, boosted operating income by $4.7 million from the year-ago level.
IDACORP reaffirms its 2024 earnings guidance in the range of $5.25-$5.45 per share. It projects capital expenditure in the range of $925-$975 million. Management expects to add more hydropower in 2024 than its previous expectation. IDA now expects to add in the range of 6.5-8.0 MWh in 2024, up from the prior expected range of 5.5-7.5 MWh.