Southern Company Q4: Utility Growth Boosts Revenue, But Rising Costs Weigh on Profit

Southern Company SO shares are trading lower on Thursday after the company reported fourth-quarter operating revenue growth of 4.9% year over year to $6.34 billion, beating the consensus of $5.88 billion. 

Operating revenues by segment: Alabama Power $1.751 billion (+7.4% Y/Y), Georgia Power $2.586 billion (+11.8% Y/Y), Mississippi Power $345 million (+2.4% Y/Y), Southern Power $417 million (-17.1% Y/Y) and Southern Company Gas $1.236 billion (-3.8% Y/Y).

Kilowatt-Hour Sales rose by 2.7%, with Retail sales up 2.8% and Wholesale sales up 2.5% Y/Y.

In particular, kilowatt-Hour retail sales benefitted from growth in commercial (+4.4% Y/Y), Industrial (+2.0% Y/Y), and residential (+1.9% Y/Y) businesses. 

Total Regulated Utility Customers increased 0.8%, with Total Traditional Electric rising 1.4% and Southern Company Gas increasing +0.3% Y/Y. 

Operating expenses rose to $5.28 billion from $4.84 billion in the quarter. Adjusted EPS of 50 cents missed the consensus of 51 cents.

For the full year 2024, adjusted EPS rose to $4.05 from $3.65 in 2023, mainly driven by increased utility revenues, partially negated by a rise in non-fuel operations and maintenance expenses, interest expense, depreciation and amortization, and income taxes.

Investors can gain exposure to the stock via SPDR Select Sector Fund – Utilities XLU and Fidelity MSCI Utilities Index ETF FUTY.

Price Action: SO shares are down 0.77% at $85.82 at the last check Thursday.

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