Southern Company on Track for Earnings Report: Analysts Predict a Decrease
The Southern Company (SO), based in Atlanta, Georgia, is a major energy provider known for generating, transmitting, and distributing electricity. With a market cap of $101.4 billion, it serves millions in the southeastern U.S. through a mix of traditional and renewable energy sources. The company plans to announce its Q3 earnings before the market opens on Thursday, Oct. 31.
Analysts Forecast a Dip in Profit
Analysts predict SO will report a profit of $1.32 per share, reflecting a 7% decrease from the $1.42 earned in the same quarter last year. Interestingly, the company has outperformed Wall Street’s earnings estimates over the past four quarters.
Last quarter’s adjusted earnings reached $1.09 per share, surpassing the consensus estimate by 19.8%. This achievement stemmed from robust utility earnings, improved operational efficiencies, and heightened energy demand driven by favorable weather conditions.
2024 Earnings Outlook Positive
Looking ahead to fiscal 2024, analysts anticipate SO will report earnings per share (EPS) of $4.02, which is a 10.1% increase from $3.65 in fiscal 2023.
Stock Performance Outshines the Market
SO stock has risen 32.2% year-to-date, outpacing the broader S&P 500 Index’s ($SPX) 22.7% gains and the Vanguard Utilities Index Fund ETF Shares’ (VPU) 28.1% increase within the same period.
Driving this success are strategic moves, including the completion of two nuclear plants in Georgia, which now position Southern Company as the largest clean energy generator in the U.S. Although these projects faced delays, they have significantly strengthened the company’s role in carbon-free energy, especially as demand for reliable power surges in an era increasingly reliant on AI and data centers.
Southern Company’s regulated utility operations yield stable cash flow, making it attractive to long-term investors. Its diversified energy mix—comprising natural gas, coal, nuclear, and renewables—allows it to adapt to changing energy prices. Coupled with a strong history of consistent dividends and government support for energy infrastructure, the company demonstrates resilience, particularly in economically uncertain times.
Additionally, warmer weather led to increased electricity sales, and when the Q2 results exceeded expectations, SO stock jumped 4.9% on Aug. 1. This highlights the company’s ability to excel in various market conditions.
Market Sentiment on Southern Company Stock
The consensus outlook for SO stock leans towards “Moderate Buy,” as per 21 analysts following the stock. Out of these analysts, eight recommend a “Strong Buy,” one advises a “Moderate Buy,” eleven suggest a “Hold,” and one calls for a “Strong Sell.”
Currently, SO trades at a premium to the average analyst price target of $91.14; however, the highest target price of $104 indicates a potential rally of up to 12.2%.
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On the date of publication, Rashmi Kumari did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data are provided solely for informational purposes. For more details, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
