Power supplier The Southern Company SO reported fourth-quarter 2024 earnings per share (excluding certain one-time items) of 50 cents, underperforming the Zacks Consensus Estimate by a penny and deteriorating from the year-ago adjusted profit of 64 cents. The disappointing numbers reflect elevated expenses. 

The utility reported revenues of $6.3 billion. The top line came in 4.9% higher than fourth-quarter 2023 sales and beat the Zacks Consensus Estimate of $6.2 billion due to a gain in overall electricity sales and favorable weather conditions.

The firm guided earnings per share between $4.20 and $4.30 for this year. Further, Southern Company management stuck to its long-term EPS growth rate projection of 5-7% based on the 2024 adjusted EPS projection.

Overall Sales Breakup

Southern Company’s wholesale power sales rose 2.5%, while there was a gain in retail electricity demand, too.

Overall, there was an improvement in electricity sales and usage. In fact, total electricity sales during the fourth quarter increased 2.7% from the same period last year.

Southern Company’s total retail sales moved up 2.8%, with residential, commercial and industrial sales increasing 1.9%, 4.4% and 2%, respectively.

Expenses Summary

The power supplier’s operations and maintenance (O&M) cost rose 14.6% year over year to $2 billion. Moreover, the utility’s total operating expense for the period — at $5.3 billion — increased 9.2% from the prior-year level and came in above our estimate of $5.1 billion.

SO’s Zacks Rank & Stock Picks

Southern Company carries a Zacks Rank #3 (Hold).

Meanwhile, investors interested in the utilities space could look at better options like NiSource Inc. NI, Atmos Energy Corporation ATO and Entergy Corporation ETR. Each of the firms carries a Zacks Rank #2 (Buy).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

NiSource: NiSource is valued at around $18.8 billion. For 2025, NI has a projected earnings growth rate of 9.1%.

NiSource delivered a four-quarter average earnings surprise of 23%. Headquartered in Merrillville, IN, NI shares have gained 55.8% in a year.

Atmos Energy Corporation: Atmos Energy is valued at around $23.8 billion. For fiscal 2025, ATO has a projected earnings growth rate of 5.1%.

Atmos Energy delivered a four-quarter average earnings surprise of 3.9%. Headquartered in Dallas, TX, ATO shares have increased 34.2% in a year.

Entergy Corporation: Entergy is valued at around $36.6 billion. For 2025, ETR has a projected earnings growth rate of 6.3%.

Entergy’s expected EPS growth rate for three to five years is currently 9.5%, which compares favorably with the industry's growth rate of 7.7%. Headquartered in New Orleans, LA, ETR shares have gained 70.2% in a year.

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Southern Company (The) (SO) : Free Stock Analysis Report

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