We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Can Southern (SO) Q4 Earnings Maintain Positive Surprise?
Read MoreHide Full Article
The Southern Company (SO - Free Report) is set to release fourth-quarter results on Feb 17. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 35 cents per share on revenues of $6.4 billion.
Let’s delve into the factors that might have influenced the power supplier’s performance in the December quarter. But it’s worth taking a look at Southern Company’s previous-quarter release first.
Highlights of Q3 Earnings & Surprise History
In the last-reported quarter, the Atlanta, GA-based service provider beat the consensus mark on the back of positive effects of rates, usage and pricing changes. Southern Company had reported adjusted earnings per share of $1.23, a penny ahead of the Zacks Consensus Estimate. The utility’s quarterly revenues of $6.2 billion also outperformed the Zacks Consensus Estimate by 5.5%.
Southern Company beat the Zacks Consensus Estimate in each of the last four quarters, delivering an earnings surprise of 7.9%, on average. This is depicted in the chart below:
The Zacks Consensus Estimate for the fourth-quarter bottom line was revised 2.8% downward in the last seven days. The estimated figure indicates a 25.5% decline year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 5.5% 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 increased its customer count by 0.9% year over year for the 12-month period ending September 2021. This trend most likely continued in the fourth quarter of 2021 because of healthy population growth across its electric and gas franchises.
On a somewhat bearish note, the power supplier’s total operating cost in the third quarter increased 19.3% year over year to $4.5 billion. The upward cost trajectory is likely to have continued in the third quarter due to escalation in the Vogtle nuclear project-related outlays, primarily stemming from quality/safety issues.
What Does Our Model Say?
The proven Zacks model does not conclusively show that Southern Company is likely to beat estimates in the fourth quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -1.13%.
Zacks Rank: Southern Company currently carries a Zacks Rank #3.
While an earnings beat looks uncertain for Southern Company, here are some firms from the utility space that you may want to consider on the basis of our model:
Ameren Corporation (AEE - Free Report) has an Earnings ESP of +1.00% and is Zacks #3 Ranked. The firm is scheduled to release earnings on Feb 17.
Consolidated Edison, Inc. (ED - Free Report) has an Earnings ESP of +2.26% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 17.
American Electric Power Co. (AEP - Free Report) has an Earnings ESP of +0.58% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 24.
Image: Bigstock
Can Southern (SO) Q4 Earnings Maintain Positive Surprise?
The Southern Company (SO - Free Report) is set to release fourth-quarter results on Feb 17. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 35 cents per share on revenues of $6.4 billion.
Let’s delve into the factors that might have influenced the power supplier’s performance in the December quarter. But it’s worth taking a look at Southern Company’s previous-quarter release first.
Highlights of Q3 Earnings & Surprise History
In the last-reported quarter, the Atlanta, GA-based service provider beat the consensus mark on the back of positive effects of rates, usage and pricing changes. Southern Company had reported adjusted earnings per share of $1.23, a penny ahead of the Zacks Consensus Estimate. The utility’s quarterly revenues of $6.2 billion also outperformed the Zacks Consensus Estimate by 5.5%.
Southern Company beat the Zacks Consensus Estimate in each of the last four quarters, delivering an earnings surprise of 7.9%, on average. This is depicted in the chart below:
Southern Company The Price and EPS Surprise
Southern Company The price-eps-surprise | Southern Company The Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for the fourth-quarter bottom line was revised 2.8% downward in the last seven days. The estimated figure indicates a 25.5% decline year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 5.5% 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 increased its customer count by 0.9% year over year for the 12-month period ending September 2021. This trend most likely continued in the fourth quarter of 2021 because of healthy population growth across its electric and gas franchises.
On a somewhat bearish note, the power supplier’s total operating cost in the third quarter increased 19.3% year over year to $4.5 billion. The upward cost trajectory is likely to have continued in the third quarter due to escalation in the Vogtle nuclear project-related outlays, primarily stemming from quality/safety issues.
What Does Our Model Say?
The proven Zacks model does not conclusively show that Southern Company is likely to beat estimates in the fourth quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -1.13%.
Zacks Rank: Southern Company currently carries a Zacks Rank #3.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks to Consider
While an earnings beat looks uncertain for Southern Company, here are some firms from the utility space that you may want to consider on the basis of our model:
Ameren Corporation (AEE - Free Report) has an Earnings ESP of +1.00% and is Zacks #3 Ranked. The firm is scheduled to release earnings on Feb 17.
Consolidated Edison, Inc. (ED - Free Report) has an Earnings ESP of +2.26% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 17.
American Electric Power Co. (AEP - Free Report) has an Earnings ESP of +0.58% and a Zacks Rank #3. The firm is scheduled to release earnings on Feb 24.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.