Power supplier Southern Company (SO - Free Report) reported first-quarter 2019 earnings per share (excluding certain one-time items) of 70 cents, same as the Zacks Consensus Estimate. The in-line performance stemmed from lower costs and expenses.
However, Southern Company’s bottom line witnessed a fall from the year-ago quarter’s profit of 88 cents on lower sales from the retail segment and the divestment of its Gulf Power subsidiary in May last year.
The Atlanta-based utility’s quarterly revenue – at $5.4 billion – came 15.1% lower than the first-quarter 2018 sales and missed the Zacks Consensus Estimate of $5.8 billion.
Overall Sales Breakup
Southern Company’s wholesale power sales decreased 13.3%. This came on top of the steep fall in retail electricity demand amid milder weather conditions.
Consequently, there was a downward movement in overall electricity sales and usage. In fact, total electricity sales during the first quarter were down 11.2% from the same period last year.
Southern Company’s total retail sales decreased 10.5%, with residential and commercial sales going down by 15.9% and 10.6%, respectively. Moreover, industrial sales declined 5%.
The power supplier’s operations and maintenance cost decreased 9.6% to $1.3 billion, while the utility’s total operating expense for the period – at $1.7 billion – was down 65.6% from the prior-year level.
Zacks Rank & Stock Picks
Southern Company – one of the largest generators of electricity in the nation along with the likes of Exelon Corporation (EXC - Free Report) and Duke Energy Corporation (DUK - Free Report) – currently retains a Zacks Rank #2 (Buy).
Apart from Southern Company, one can also look at another player in the space, Ameren Corporation (AEE - Free Report) , that also sports a Zacks Rank #2.
Ameren boasts of a good earnings surprise history. It has a 75% track of outperforming estimates over the last four quarters at an average rate of 8.6%.
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