Southern Company’s 4Q17 Earnings: What You Need to Know

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Southern Company’s 4Q17 Earnings: What You Need to Know PART 1 OF 5

Will Southern Company Meet 4Q17 Estimates?

Analysts expect lower revenues

The Georgia-based Southern Company (SO) is slated to report its 4Q17 and 2017 earnings on February 21.  According to Wall Street analysts, Southern Company is expected to report total revenues of $5.01 billion for the quarter, which ended on December 31, 2017. For the same quarter in 2016, it reported total revenues of $5.20 billion.

For fiscal 2017, analysts expect Southern Company to generate total revenues of more than $22 billion, an approximately 13% increase over 2016.

Will Southern Company Meet 4Q17 Estimates?

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Revenue growth

Weather could play an important role in driving Southern Company’s 4Q17 revenues. Its revenues from gas operations have been trending upward for the last few quarters after its acquisition of AGL Resources. Southern Company’s retail electric volume growth was around 2% for the nine months that ended on September 30, 2017, versus the same period in 2016. Southern Company’s customer base expansion could positively impact its top line for the quarter. Its customers increased by around 1% in the last few quarters.

Apart from Southern Company’s quarterly earnings, investors must be keenly awaiting management’s update on the utility’s power plants. Southern Company recently decided to go ahead with its half-constructed Vogtle nuclear power plant. However, there’s a lot of uncertainty regarding its completion due to frequent delays and cost overruns. Kemper County power plant in Mississippi is another headache for Southern Company and its investors, as we’ll discuss in the next part of this series.

Southern Company’s peer Duke Energy (DUK) plans to report its quarterly earnings on February 20. The largest utility by market capitalization, NextEra Energy (NEE), reported last month. See NextEra Energy Missed 4Q17 Estimates but Eyes Stronger Growth Ahead.


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