Southern Company Q4 Earnings Disappoint as Costs Increase

Power supplier The Southern Company SO reported fourth-quarter 2025 earnings per share (excluding certain one-time items) of 55 cents, missing the Zacks Consensus Estimate by a penny. The underperformance reflects higher expenses that weighed on SO’s quarterly profitability.

However, the bottom line came above the year-ago adjusted profit of 50 cents due to higher retail sales on the back of data center load growth and new customer additions. 

The utility reported revenues of $7 billion. The top line came in 10.1% higher than fourth-quarter 2024 sales and beat the Zacks Consensus Estimate by $117 million.

The firm guided earnings per share of $4.50-$4.60 for this year and $1.20 for the March quarter. Further, Southern Company management expects its long-term EPS growth rate to be 8% through 2030.

Southern Company (The) Price, Consensus and EPS Surprise

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

Overall Sales Breakup

Southern Company’s wholesale power sales rose 14.5%, to go with a gain in retail electricity demand.

Overall, there was an uptick in electricity sales and usage. In fact, total electricity sales during the fourth quarter were up 4.9% from the same period last year.

Southern Company’s total retail sales also improved 1.7%, with residential, commercial and industrial sales increasing 1.3%, 3% and 0.7%.

Expenses Summary

The Zacks Rank #3 (Hold) power supplier’s operations and maintenance (O&M) cost rose 6.1% year over year to $2.1 billion. Southern Company’s total operating expense for the period — at $6.1 billion — increased 14.8% from the prior-year level.

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

Some Key Utility Earnings

While we have discussed The Southern Company’s fourth-quarter results in detail, let’s see how some other utilities have fared this earnings season.
    
Exelon Corporation’s EXC EPS of 59 cents surpassed the Zacks Consensus Estimate of 53 cents by 11.3%. The bottom line decreased 7.8% from the year-ago level of 64 cents. Exelon’s beat was due to impressive distribution and transmission rates at ComEd, favorable weather at PECO, and impacts of the multi-year plan reconciliation at BGE. These positives were partially offset by higher income taxes, contracting costs, depreciation expense, and the absence of the storm cost deferral at PECO, higher contracting costs at PHI, higher interest expense at PECO and BGE, and the timing of distribution earnings at ComEd.

In the reported quarter, Exelon served more customers than in the year-ago quarter. Consequently, total electric deliveries touched 86,585 gigawatt hours in 2025, up 2.7% from the year-ago period, primarily due to higher volumes sold to most of the customer group. Due to revenue decoupling, Exelon’s distribution earnings were not affected by actual weather or customer usage patterns.

American Water Works Company AWK posted EPS of $1.24, which lagged the Zacks Consensus Estimate of $1.28 by 3.1%. The bottom line improved 7.8% from the year-ago quarter's level of $1.15, driven by higher year-over-year revenues and operating income growth. American Water Works’ total quarterly revenues of $1.27 billion surpassed the Zacks Consensus Estimate of $1.22 billion by 3.9%. The top line also increased 5.8% from the year-ago figure of $1.2 billion.

American Water Works affirmed its 2026 EPS guidance in the range of $6.02-$6.12. The company plans to invest $3.7 billion in 2026. Over the long run, most of its outlook remains unchanged. American Water Works still expects its long-term EPS and dividend growth to be 7-9% and rate base growth of 8-9%. In terms of its long-term capital expenditure plan, American Water expects to invest $19-$20 billion during 2026-2030 and $46-$48 billion during 2026-2035.

IDACORP, Inc. IDA reported fourth-quarter 2025 earnings of 78 cents per share, which topped the Zacks Consensus Estimate of 74 cents by 5.4%. The company’s earnings improved 11.4% from 70 cents in the year-ago quarter. The outperformance was due to continued strong customer growth, rate changes, lower income tax expenses and the use of tax credits under the company's Idaho regulatory mechanism.

IDACORP’s customer volume increased 2.3% year over year for the 12 months ended Dec. 31, 2025. This boosted operating income by $5.7 million compared with the year-ago level. IDACORP’s operations and maintenance expenses were $12.9 million, lower than the year-earlier level. Meanwhile, IDACORP initiated its 2026 earnings guidance of $6.25-$6.45 per share and projected capital expenditure between $1.3 billion and $1.5 billion.

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

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