Southern Company Q3 Earnings Beat on Higher Electricity Sales

Core Insights - Southern Company reported third-quarter 2024 earnings per share of $1.43, exceeding the Zacks Consensus Estimate of $1.33 and slightly higher than the previous year's adjusted profit, driven by increased electricity sales and favorable rate changes [1] - The utility's revenues reached $7.3 billion, a 4.2% increase from third-quarter 2023, surpassing the Zacks Consensus Estimate of $7.1 billion [2] - Southern Company maintains a long-term EPS growth rate projection of 5-7% based on the 2024 adjusted EPS forecast of $4.05 [2] Sales Performance - Wholesale power sales increased by 8.2%, while total electricity sales rose by 1.1% year-over-year, despite a decline in retail electricity demand [3] - Total retail sales decreased by 1.1%, with residential and commercial sales down by 3% and 0.4%, respectively, while industrial sales improved by 0.4% [3] Expense Overview - Operations and maintenance costs rose by 16.7% year-over-year to $1.7 billion, contributing to a total operating expense of $4.9 billion, which was a 0.7% increase from the prior year and above the estimate of $4.8 billion [4] Investment Opportunities - Southern Company holds a Zacks Rank 3 (Hold), while other utility companies like NiSource Inc., Atmos Energy Corporation, and Duke Energy Corporation have better ratings with Zacks Rank 2 (Buy) [5] - NiSource has a projected earnings growth rate of 8.1% for 2024, with shares gaining 38.3% over the past year [6] - Atmos Energy's projected earnings growth rate for fiscal 2024 is 11.3%, with shares increasing by 28.5% in the last year [6] - Duke Energy has a projected earnings growth rate of 7.6% for 2024, with shares gaining 27.3% over the past year [7]