The Southern Company (SO Quick QuoteSO - Free Report) is set to release third-quarter results on Oct. 31. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $1.34 per share on revenues of $7.2 billion.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Let’s delve into the factors that might have influenced the power supplier’s performance in the September quarter. But it’s worth taking a look at Southern Company’s previous-quarter results first.

Highlights of Q2 Earnings & Surprise History

In the last reported quarter, the Atlanta, GA-based service provider beat the consensus mark on gain in overall electricity sales to go with the positive effects of weather, rates, usage and pricing changes. Southern Company had reported adjusted earnings per share of $1.09, ahead of the Zacks Consensus Estimate of 91 cents. Revenues of $6.5 billion also came in 3.3% above the consensus mark.

SO topped the Zacks Consensus Estimate for earnings in each of the last four quarters. The utility has a trailing four-quarter earnings surprise of 12.6%, on average. This is depicted in the graph below:

Trend in Estimate Revision

The Zacks Consensus Estimate for the third-quarter bottom line has been revised 1.5% upward in the past seven days. The estimated figure indicates a 5.6% decline year over year. The Zacks Consensus Estimate for revenues, however, suggests a 2.8% increase from the year-ago period.

Factors to Consider

Southern Company's seven major regulated utilities serve approximately nine million electric and natural gas customers. Leveraging the demographics of its operating territories, the firm has been successfully expanding its regulated business customer base. As proof of that effort, Southern Company added more than 14,000 new residential electric customers and in excess of 6,000 residential natural gas customers in the second quarter of 2024. This trend is most likely to have continued in the July-September period of 2024 because of healthy economic development across its service territories.

On a further bullish note, the power supplier’s operations and maintenance cost in the third quarter might have come down due to prudent management. This, in turn, is likely to have buoyed overall earnings. In particular, our estimate for operations and maintenance outgo is pegged at $1.2 billion, indicating a 17.6% drop from $1.4 billion reported in the year-ago quarter.

Why a Likely Positive Surprise?

Our proven model predicts an earnings beat for The Southern Company this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

SO has an Earnings ESP of +2.25% and a Zacks Rank #3.

Other Stocks to Consider

Southern Company is not the only company in the utilities space looking up this earnings cycle. Here are some other firms from the space that you may want to consider on the basis of our model:

Public Service Enterprise Group Incorporated (PEG Quick QuotePEG - Free Report) has an Earnings ESP of +1.50% and a Zacks Rank #3. The firm is scheduled to release earnings on Nov. 4.

You can see the complete list of today’s Zacks #1 Rank stocks here.

For 2024, PEG has a projected earnings growth rate of 5.5%. Valued at around $44.7 billion, Public Service Enterprise Group has gained 49.7% in a year.

The AES Corporation (AES Quick QuoteAES - Free Report) has an Earnings ESP of +1.11% and a Zacks Rank #3. The firm is scheduled to release earnings on Oct. 31.

For 2024, AES has a projected earnings growth rate of 8.5%. Valued at around $12.1 billion, AES has increased 16.3% in a year.