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Southern Company’s 4Q16 Revenues Surged on Favorable Weather

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Southern Company’s revenues jump 45%

Atlanta-based Southern Company (SO), one of the largest regulated utilities, reported its fourth quarter and 2016 full-year financial results on February 22, 2017. It reported total revenues of $5.2 billion for the quarter ended December 31, 2016. For the corresponding quarter in 2015, the utility reported total revenues of $3.6 billion.

Favorable weather and solid revenue contribution from Southern Company’s wholesale segment led to a 45% rise in its total revenues compared to the same period in 2015.

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Revenue drivers

During the fourth quarter of 2016, Southern Company’s operational territories experienced favorable weather, which drove consumption. Total electric sales in 4Q16 rose 6.2% compared to 4Q15. Revenues from Southern Company’s wholesale segment, Southern Power, zoomed 31.1% in the reported quarter compared to 4Q15.

Due to weather-related usage, Southern Company’s residential sales rose 8.7% while commercial sales rose 0.7% compared to the same period in 2015. Industrial sales continued their downtrend in 4Q16 as well. They fell 2.4% in the reported quarter compared to the year-ago quarter.

Revenues from Southern Company Gas rose $1.1 billion during 4Q16 compared to 4Q15. Southern Company’s total revenues in 2016 came in at $19.9 billion against its revenues of $17.5 billion in 2015, accounting for sturdy growth of nearly 14%.

Weather in 4Q16 helped many utilities (XLU) such as Duke Energy (DUK). Duke posted a 6% increase in revenues year-over-year. On the other hand, NextEra Energy (NEE), which primarily operates in Florida, reported a 9% fall in revenues due to unfavorable weather in 4Q16.

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