Will Q1 Earnings Fuel Southern Company Stock’s Rally?

Southern Company’s EPS fell 20%

Southern Company (SO) reported its first-quarter earnings today. It reported adjusted earnings of $0.70 per share, missing consensus estimates for the quarter. In the same quarter last year, it reported earnings of $0.88 per share.

Southern Company stock has been on a solid run so far this year. It’s up about 22% YTD, double the average returns for utility stocks (XLU). It will be interesting to see whether Southern Company stock continues to march upward on its Q1 results.

Will Q1 Earnings Fuel Southern Company Stock’s Rally?

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Earnings highlights

Southern Company reported total revenues of $5.41 billion during the first quarter, representing a fall of more than 15% YoY. The utility’s customer count decreased by approximately 9% in Q1 2019 compared to Q1 2018. A notable drop in revenues and its customer base could be due to the sale of its subsidiaries such as Gulf Power Company, Florida City Gas, and Elkton Gas to NextEra Energy (NEE) in the last six months. Weather-normalized retail electric sales fell 1.2% in Q1 2019 YoY.

Southern Company reaffirmed its schedule on Plant Vogtle, the only under-construction nuclear power plant in the country. The project is 77% complete and expected to be in service by November 2021 and 2022. Southern Company’s management has given earnings guidance of $0.72 per share for Q2 2019.

Utility giants NextEra Energy and American Electric Power Company (AEP) reported their quarterly earnings last week. Both continued their strong earnings growth streak during the quarter and notably exceeded consensus estimates.