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Southern (SO) Q2 Earnings Beat on Higher Electricity Sales
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Power supplier The Southern Company (SO - Free Report) reported second-quarter 2024 earnings per share (excluding certain one-time items) of $1.09, well ahead of the Zacks Consensus Estimate of 91 cents and significantly higher than the year-ago adjusted profit of 79 cents. The outperformance reflects a gain in overall electricity sales to go with the positive effects of weather, rates, usage and pricing changes.
The utility reported revenues of $6.5 billion. The top line came in 12.4% higher than second-quarter 2023 sales and beat the Zacks Consensus Estimate of $6.3 billion.
The firm guided earnings per share of $3.95-$4.05 for this year and $1.30 for the September 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’s wholesale power sales edged down 1.1%, though there was a gain in retail electricity demand.
Overall, there was an improvement in overall electricity sales and usage. In fact, total electricity sales during the second quarter rose 3.9% from the same period last year.
Southern Company’s total retail sales moved up 5.8%, with residential and commercial sales increasing 11.2% and 7.1%, respectively. Meanwhile, industrial sales remained unchanged from the year-ago period.
Expenses Summary
The power supplier’s operations and maintenance (O&M) cost fell 5.4% year over year to $1.4 billion. However, the Zacks Rank #3 (Hold) utility’s total operating expense for the period — at $4.5 billion — was up 1.5% from the prior-year level but below our estimate of $4.6 billion.
While we have discussed SO’s second-quarter results in detail, let’s see how some other utilities have fared this earnings season.
PPL Corporation (PPL - Free Report) reported second-quarter 2024 operating EPS of 38 cents, which surpassed the Zacks Consensus Estimate of 31 cents by 22.6%. The bottom line also increased 31% from the year-ago quarter’s figure of 29 cents.
PPL’s total operating expenses were $1.49 billion, down 1.8% from the year-ago quarter’s $1.52 billion. This decrease was attributed to a fall in energy purchase expenses. Meanwhile, PPL reiterated its projection for capital expenditure for 2024 to 2027 at $14.3 billion. The utility also reaffirmed long-term annual earnings growth rate in the range of 6-8% through 2027.
American Water Works Company (AWK - Free Report) posted second-quarter 2024 operating EPS of $1.42, which lagged the Zacks Consensus Estimate of 99 cents by 3.4%. The bottom line also declined 1.4% from the year-ago quarter's earnings of $1.44. The underperformance in earnings stemmed from the adverse impact of unfavorable weather in 2024, partly offset by increases from the completed general rate cases and infrastructure proceedings for the recovery of incremental capital and acquisition investments.
American Water revised its 2024 EPS guidance to the range of $5.25-$5.30 from the prior band of $5.20-$5.30, though it reiterated long-term earnings and dividend growth in the range of 7-9%. Additionally, AWK plans to invest nearly $3.1 billion across its footprint in 2024.
IDACORP, Inc. (IDA - Free Report) reported second-quarter 2024 earnings of $1.71 per share, which beat the Zacks Consensus Estimate by 24.8%. The company had reported earnings of $1.35 in the year-ago quarter. Customer growth in IDACORP's service areas increased 2.6% year over year for the 12 months ended Jun 30, 2024. This, in turn, boosted operating income by $6.2 million from the year-ago level.
IDACORP revised its 2024 earnings guidance to $5.30-$5.45 per share from the previously guided range of $5.25-$5.45 per share. It still 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 7.0-8.0 MWh in 2024, up from the prior expected range of 6.5-8.0 MWh.
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Southern (SO) Q2 Earnings Beat on Higher Electricity Sales
Power supplier The Southern Company (SO - Free Report) reported second-quarter 2024 earnings per share (excluding certain one-time items) of $1.09, well ahead of the Zacks Consensus Estimate of 91 cents and significantly higher than the year-ago adjusted profit of 79 cents. The outperformance reflects a gain in overall electricity sales to go with the positive effects of weather, rates, usage and pricing changes.
The utility reported revenues of $6.5 billion. The top line came in 12.4% higher than second-quarter 2023 sales and beat the Zacks Consensus Estimate of $6.3 billion.
The firm guided earnings per share of $3.95-$4.05 for this year and $1.30 for the September 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
Overall Sales Breakup
Southern Company’s wholesale power sales edged down 1.1%, though there was a gain in retail electricity demand.
Overall, there was an improvement in overall electricity sales and usage. In fact, total electricity sales during the second quarter rose 3.9% from the same period last year.
Southern Company’s total retail sales moved up 5.8%, with residential and commercial sales increasing 11.2% and 7.1%, respectively. Meanwhile, industrial sales remained unchanged from the year-ago period.
Expenses Summary
The power supplier’s operations and maintenance (O&M) cost fell 5.4% year over year to $1.4 billion. However, the Zacks Rank #3 (Hold) utility’s total operating expense for the period — at $4.5 billion — was up 1.5% from the prior-year level but below our estimate of $4.6 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 second-quarter results in detail, let’s see how some other utilities have fared this earnings season.
PPL Corporation (PPL - Free Report) reported second-quarter 2024 operating EPS of 38 cents, which surpassed the Zacks Consensus Estimate of 31 cents by 22.6%. The bottom line also increased 31% from the year-ago quarter’s figure of 29 cents.
PPL’s total operating expenses were $1.49 billion, down 1.8% from the year-ago quarter’s $1.52 billion. This decrease was attributed to a fall in energy purchase expenses. Meanwhile, PPL reiterated its projection for capital expenditure for 2024 to 2027 at $14.3 billion. The utility also reaffirmed long-term annual earnings growth rate in the range of 6-8% through 2027.
American Water Works Company (AWK - Free Report) posted second-quarter 2024 operating EPS of $1.42, which lagged the Zacks Consensus Estimate of 99 cents by 3.4%. The bottom line also declined 1.4% from the year-ago quarter's earnings of $1.44. The underperformance in earnings stemmed from the adverse impact of unfavorable weather in 2024, partly offset by increases from the completed general rate cases and infrastructure proceedings for the recovery of incremental capital and acquisition investments.
American Water revised its 2024 EPS guidance to the range of $5.25-$5.30 from the prior band of $5.20-$5.30, though it reiterated long-term earnings and dividend growth in the range of 7-9%. Additionally, AWK plans to invest nearly $3.1 billion across its footprint in 2024.
IDACORP, Inc. (IDA - Free Report) reported second-quarter 2024 earnings of $1.71 per share, which beat the Zacks Consensus Estimate by 24.8%. The company had reported earnings of $1.35 in the year-ago quarter. Customer growth in IDACORP's service areas increased 2.6% year over year for the 12 months ended Jun 30, 2024. This, in turn, boosted operating income by $6.2 million from the year-ago level.
IDACORP revised its 2024 earnings guidance to $5.30-$5.45 per share from the previously guided range of $5.25-$5.45 per share. It still 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 7.0-8.0 MWh in 2024, up from the prior expected range of 6.5-8.0 MWh.