Short Description: Southern Company’s Q4 earnings are due Feb 19th. We analyze key factors like weather, costs, and growth, plus spotlight utility stocks with better beat potential.
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Southern Company (SO) Q4 2024 Earnings Preview: Key Factors and Market Expectations
The Southern Company (SO) is scheduled to report its fourth-quarter earnings on February 19th. The Zacks Consensus Estimate is currently pegged at earnings per share of 56 cents on revenues of $6.9 billion, representing year-over-year growth of 12% and 8.3%, respectively. This follows a strong Q3 2024 where the utility beat earnings estimates, driven by investments in regulated assets and customer growth. However, the proven Zacks model does not currently predict an earnings beat for SO this quarter, citing a negative Earnings ESP and a Zacks Rank #4 (Sell).
Several factors will influence the quarterly results. On the positive side, firm load growth, particularly from a booming data center segment and newly signed large-scale contracts, provides solid revenue visibility. Conversely, a warmer-than-expected start to winter in the Southeast could have dampened residential heating demand. Furthermore, the company’s massive $76 billion capital investment plan continues to pressure margins through higher depreciation and interest expenses, a trend noted in previous quarters.
For investors looking at the broader utilities sector, the model identifies several companies with a higher probability of an earnings surprise. IDACORP, Inc. (IDA), which reports on the same day, combines a Zacks Rank #2 with a positive Earnings ESP. Similarly, The AES Corporation (AES) and Sempra (SRE), reporting later in February, also show a favorable mix of rank and ESP. These stocks present alternative opportunities within the stable utilities space for those monitoring earnings season.
Short Summary:
Southern Company (SO) reports Q4 earnings on Feb 19 amid expectations for year-over-year growth. Key watch points include weather impacts on demand and ongoing cost pressures from heavy infrastructure investments. While SO’s earnings beat potential is uncertain, utilities like IDACORP (IDA) and Sempra (SRE) show stronger predictive metrics for a positive surprise this reporting season.
