Southern Company Q3: Revenue Misses, But EPS Beats Expectations with Strong Utility Gains

Southern Company SO reported that third-quarter operating revenue rose 4.2% year over year to $7.274 billion, missing the consensus of $7.287 billion. 

Operating revenues by segment (year-over-year): Alabama Power $2.138 billion (+2.6%), Georgia Power $3.472 billion (+7.3% Y/Y), Mississippi Power $412 million (-5.5%), Southern Power $600 million (-8.1 %) and Southern Company Gas $682 million (-1.0%).

Total Regulated Utility Customers increased 0.8%, with Total Traditional Electric +1.2% and Southern Company Gas +0.4%. Kilowatt-Hour Sales rose by 1.1%, with Retail sales down 1.1% and Wholesale sales up 8.2%.

Operating expenses rose to $4.91 billion from $4.87 billion in the quarter.

Adjusted EPS improved to $1.43, beating the consensus of $1.34.

Adjusted earnings were led by higher utility revenues, partially offset by increased interest expense, depreciation and amortization, non-fuel operations and maintenance expenses, and income taxes.

Outlook: Southern revised adjusted EPS guidance from $3.95 – $4.05 to $4.05, compared to the $4.03 estimate.

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 up 1.79% at $90.96 at the last check Thursday.

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