Southern Company’s 3Q15 Revenues Missed Consensus Estimates

As we discussed in Part 1 of this series, Southern Company (SO) missed the 3Q15 consensus revenue estimates given by Wall Street analysts. Southern Company reported revenues of $5.4 billion for 3Q15, which is ~6.1% lower than analyst estimates. The reported revenues were about 1.2% higher than its reported revenues in 3Q14.

Southern Company (SO) is part of the Utilities Select Sector SPDR ETF (XLU). One of its competitors, NextEra Energy (NEE), reported revenues of $4.9 billion, which is about 2.6% higher than the consensus revenue estimate given by Wall Street analysts.

Two of Southern Company’s other competitors, Duke Energy Corporation (DUK) and AES Corporation (AES), have consensus revenue estimates of about $6.8 billion and $5.4 billion, respectively. They plan to release their 3Q15 earnings by the end of the first week of November.

Retail revenues totaling $4.7 billion contribute 87% to Southern Company’s total consolidated revenues. Out of these, retail and fuel revenues contribute ~$1.4 billion, or 26.5% of total revenues. Non-fuel retail revenues contribute about $3.3 billion, or 60.5% of total revenues. All other revenues total about $0.7 billion, or 13.0% of total revenues.

The movement in sales for each of the segments of Southern Company compared to 3Q14 sales are:

• Kilowatt-hour sales to retail consumers: 1.3% increase
• Residential energy sales: 2.7% increase
• Commercial energy sales: 1.9% increase
• Industrial energy sales: 0.6% decrease

In the next part, we’ll look at Southern Company’s dividend and capex.