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Southern Company (SO) Q4 Earnings Top, Vogtle Dates Unchanged

Power supplier Southern Company SO reported fourth-quarter 2020 earnings per share (excluding certain one-time items) of 47 cents, beating the Zacks Consensus Estimate of 43 cents and above the year-ago adjusted profit of 27 cents. The outperformance primarily stemmed from successful cost containment measures as well as positive effects of rates, usage and pricing changes.

The utility reported revenues of $5.1 billion, which beat the Zacks Consensus Estimate by a marginal 0.9% and was 4.1% higher than fourth-quarter 2019 sales.

The firm is guiding for earnings per share of $3.25-$3.35 this year and 84 cents for the March quarter. Further, Southern Company management raised its long-term EPS growth rate projection to 5-7% (from 4-6% before) based on 2024 adjusted EPS of $4-$4.30.

Southern Company The Price, Consensus and EPS Surprise

Southern Company The price-consensus-eps-surprise-chart | Southern Company The Quote

 

Vogtle Updates

Per Southern Company’s latest earnings presentation, it continues to progress toward completing the Units 3 and 4 of the Vogtle nuclear project by the November 2021 and November 2022 regulatory approved in-service dates. At the same time, the firm increased the share of its Georgia Power subsidiary in capital costs for the units by $176 million to $8.7 billion, primarily due to the impacts of the pandemic.

Overall Sales Breakup

Southern Company’s wholesale power sales decreased 3.7%. There was also a fall in retail electricity demand.

Consequently, there was a downward movement in overall electricity sales and usage. In fact, total electricity sales during the fourth quarter were down 1.9% from the same period last year.

Southern Company’s total retail sales were down 1.3%, with commercial and industrial sales going down by 4.4% and 1.4%, respectively. But on a bullish note, residential sales rose 2.3%.

Expenses Summary

The power supplier’s operations and maintenance cost fell 5.7% year-over-year to $1.6 billion but the utility’s total operating expense for the period — at $4.4 billion — was up 3.9% from 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 Corporation EXC and Duke Energy Corporation DUK — carries a Zacks Rank #3 (Hold).

Meanwhile, investors interested in the utility space could look at a better option like ONEOK, Inc. OKE that carries a Zacks Rank #1 (Strong Buy). has an expected earnings growth rate of 114.38% for the current year.

You can see the complete list of today’s Zacks #1 Rank stocks here.

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