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Southern Company Focuses on This for Revenue Growth

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Dec. 4 2020, Updated 10:53 a.m. ET

Southern Company to report on October 31

Georgia-based Southern Company (SO) will announce its 3Q16 financial results on October 31, 2016. For the quarter, analysts are expecting the company to report sales of $6 billion.

Southern Company reported sales of $5.4 billion in 3Q15. Southern Company has missed analysts’ revenue estimates in the last five quarters.

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What will impact revenue?

Southern Company obtains more than 85% of its revenue from regulated operations. With its AGL Resources acquisition, the company’s regulated rate base has risen nearly 15% to $50 billion, the largest of any US utility. An expanded rate base and increased regulated gas distribution operations could improve Southern Company’s revenue for the quarter.

Economic growth in Southern Company’s principal operating states could have an impact on customer base growth. Favorable weather in 3Q16 may have triggered higher electricity utilization, which could push up the company’s revenue for the quarter.

On the other hand, residential customers, which form a major chunk of Southern Company’s revenue, paid 0.7% less for electricity in 1H16. The trend may have continued in the third quarter, negatively affecting the top lines of utilities. However, a modest rise in natural gas prices in 2H16 could lift power prices later this year.

Southern Company’s peers NextEra Energy (NEE), Dominion Resources (D), and Public Service Enterprise Group (PEG) will also report their quarterly earnings on October 31, 2016.

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