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Southern Company Q4 Earnings Top, Revenues Miss

Zacks Equity Research

Electric utility firm Southern Company SO reported fourth-quarter 2015 earnings per share (excluding certain one-time items) of 44 cents, ahead of the Zacks Consensus Estimate of 42 cents and higher than the year-ago adjusted profit of 38 cents. The strong numbers can be attributed to lower costs.

The Atlanta-based power supplier’s quarterly revenue – at $3,606 million – came 10% lower than the fourth-quarter 2014 level of $4,017 million and failed to surpass the Zacks Consensus Estimate of $4,437 million amid a dip in retail sales.

Overall Sales Breakup

A warm winter hampered Southern Company’s retail electricity demand. Things were further aggravated by a 9.8% decline in wholesale sales. This brought about a downward movement in overall electricity sales and usage. Total electricity sales during the fourth quarter deteriorated 6.3% from the same period last year.

Southern Company’s total retail sales fell 5.7%. This mainly reflects sharply lower residential sales that dived 13.5% year over year. Also, demand from industrial customers fell 2.7%.

Expenses Summary

Southern Company’s operations and maintenance cost decreased 15% to $1,134 million, while total operating expense for the period – at $3,028 million – was approximately 12% lower than 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 Corp. EXC and Duke Energy Corp. DUK –  currently retains a Zacks Rank #2 (Buy).

Apart from Southern Company, one can also look at Atlantic Power Corp. AT as a good buying opportunity. This electric utility stock – sporting a Zacks Rank #1 (Strong Buy) – offers tremendous value and is worth buying now.

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EXELON CORP (EXC): Free Stock Analysis Report
 
SOUTHERN CO (SO): Free Stock Analysis Report
 
DUKE ENERGY CP (DUK): Free Stock Analysis Report
 
ATLANTIC PWR CP (AT): Free Stock Analysis Report
 
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