Southern Company to Report Q1 Earnings: What's in the Cards?

The Southern Company SO is set to release first-quarter results on May 1. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of $1.18 per share on revenues of $6.9 billion.

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

Highlights of Q4 Earnings & Surprise History

In the last reported quarter, the Atlanta, GA-based service provider missed the consensus mark on elevated expenses. Southern Company had reported adjusted earnings per share of 50 cents, lagging the Zacks Consensus Estimate of 51 cents. However, revenues of $6.3 billion came in 2% above the consensus mark due to a gain in overall electricity sales and favorable weather conditions.

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 10%, 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 first-quarter bottom line has been revised a penny upward in the past seven days. The estimated figure indicates a 14.6% improvement year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 4.4% increase from the year-ago period.

Factors to Consider

Southern Company's seven major regulated utilities serve approximately nine million electric and natural gas customers. Leveraging the demographics of its operating territories, the firm has been successfully expanding its regulated business customer base. As proof of that effort, Southern Company added more than 57,000 new residential electric customers in 2024. This trend is most likely to have continued in the first quarter of 2025 because of healthy economic development across its service territories.

On a further bullish note, the power supplier’s operating expenses in the first quarter might have come down due to prudent management. This, in turn, is likely to have buoyed overall earnings. In particular, our estimate for total operating-related outgo is pegged at $4.8 billion, indicating a 2.4% drop from $4.9 billion reported in the year-ago quarter.

Why a Likely Positive Surprise?

Our proven model predicts an earnings beat for The Southern Company this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

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

SO has an Earnings ESP of +1.47% and a Zacks Rank #3.

(See the Zacks Earnings Calendar to stay ahead of market-making news.)

Other Stocks to Consider

Southern Company is not the only company in the utilities space looking up this earnings cycle. Here are some other firms from the space that you may want to consider on the basis of our model:

Public Service Enterprise Group Incorporated PEG: It has an Earnings ESP of +1.20% and a Zacks Rank #3. Public Service Enterprise Group is scheduled to release earnings on April 30.

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

For 2025, PEG has a projected earnings growth rate of 9%. Valued at around $40.4 billion, Public Service Enterprise Group has gained 18.1% in a year.

Dominion Energy D: It has an Earnings ESP of +1.74% and a Zacks Rank #3. Dominion Energy is scheduled to release earnings on May 1.

For 2025, D has a projected earnings growth rate of 22%. Valued at around $45.1 billion, Dominion Energy has gained 3.6% in a year.

American Electric Power AEP: It has an Earnings ESP of +0.54% and a Zacks Rank #3. American Electric Power is scheduled to release earnings on May 6.

For 2025, AEP has a projected earnings growth rate of 4.1%. Valued at around $57 billion, American Electric Power has increased 23.2% in a year.

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

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