Southern Company Q2 Earnings: What's in Store for Investors?

The Southern Company SO is set to release second-quarter results on July 31. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 93 cents per share on revenues of $6.7 billion.

Let’s delve into the factors that might have influenced the power supplier’s performance in the June quarter. But it’s worth taking a look at Southern Company’s previous-quarter results first.

Highlights of Q1 Earnings & Surprise History

In the last reported quarter, the Atlanta, GA-based service provider beat the consensus mark due to a gain in overall electricity sales, favorable weather conditions and lower-than-expected expenses. Southern Company had reported adjusted earnings per share of $1.23, which is 3 cents ahead of the Zacks Consensus Estimate. Revenues of $7.8 billion also came in 11% above the consensus mark.

SO topped the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other. The utility has a trailing four-quarter earnings surprise of 7%, on average. This is depicted in the graph below:

Southern Company (The) Price and EPS Surprise

Southern Company (The) price-eps-surprise | Southern Company (The) Quote

Trend in Estimate Revision

The Zacks Consensus Estimate for the second-quarter bottom line has been revised 5.1% downward in the past seven days. The estimated figure indicates a 14.7% deterioration year over year. The Zacks Consensus Estimate for revenues, however, suggests a 3.7% increase from the year-ago period.

Factors to Consider

Serving nine million customers across the Southeast, SouthernCompany benefits from robust regional economic and population growth. These service territories continue to attract major commercial and industrial projects, with over $11 billion in capital investment and 4,000 new jobs announced in the first quarter of 2025 alone. In particular, industrial and data center demand continues to drive long-term load expansion. This trend is most likely to have continued in the second quarter of 2025, thereby adding to SO’s earnings and cash flows.

But on a bearish note, the power supplier’s operating expenses in the second quarter might have gone up as its aggressive investment plans start weighing on cash flows. This, in turn, is likely to have dragged down overall earnings. In particular, our estimate for total operating-related outgo is pegged at $4.9 billion, indicating a 9.1% increase from $4.5 billion reported in the year-ago quarter.

What Does Our Model Say?

The proven Zacks model does not conclusively show that The Southern Company is likely to beat estimates in the second quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -5.40%.

Zacks Rank: SO currently carries a Zacks Rank #3 (Hold).

Other Stocks to Consider

While an earnings beat looks uncertain for The Southern Company, here are some firms from the utilities space that you may want to consider on the basis of our model:

IDACORP, Inc. IDA: It has an Earnings ESP of +1.56% and a Zacks Rank #2. IDACORP is scheduled to release earnings on July 31.

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

For 2025, IDA has a projected earnings growth rate of 6%. Valued at around $6.5 billion, IDACORP has gained 24.4% in a year.

CMS Energy Corporation CMS: It has an Earnings ESP of +1.56% and a Zacks Rank #3. CMS Energy is scheduled to release earnings on July 31.

For 2025, CMS Energy has a projected earnings growth rate of 7.5%. Valued at around $21.3 billion, CMS Energy has gained 11% in a year.

ONE Gas, Inc. OGS: It has an Earnings ESP of +3.22% and a Zacks Rank #2. ONE Gas is scheduled to release earnings on Aug. 5.

For 2025, ONE Gas Energy has a projected earnings growth rate of 9.7%. Valued at around $4.3 billion, ONE Gas has gained 3.1% in a year.

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This article originally published on Zacks Investment Research (zacks.com).

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