Southern Company Meets on Revenues, Misses on EPS

Southern Company (NYSE: SO  ) reported earnings on July 31. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), Southern Company met expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue expanded slightly. Non-GAAP earnings per share shrank. GAAP earnings per share dropped significantly.

Margins dropped across the board.

Revenue details
Southern Company booked revenue of $4.25 billion. The six analysts polled by S&P Capital IQ anticipated a top line of $4.30 billion on the same basis. GAAP reported sales were 1.6% higher than the prior-year quarter's $4.18 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.

EPS details
EPS came in at $0.66. The 17 earnings estimates compiled by S&P Capital IQ forecast $0.68 per share. Non-GAAP EPS of $0.66 for Q2 were 4.3% lower than the prior-year quarter's $0.69 per share. GAAP EPS of $0.34 for Q2 were 52% lower than the prior-year quarter's $0.71 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.

Margin details
For the quarter, gross margin was 42.3%, 70 basis points worse than the prior-year quarter. Operating margin was 25.7%, 120 basis points worse than the prior-year quarter. Net margin was 7.4%, 750 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $5.39 billion. On the bottom line, the average EPS estimate is $1.14.

Next year's average estimate for revenue is $17.19 billion. The average EPS estimate is $2.76.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,026 members out of 1,087 rating the stock outperform, and 61 members rating it underperform. Among 284 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 273 give Southern Company a green thumbs-up, and 11 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Southern Company is hold, with an average price target of $47.13.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month. The Motley Fool recommends Southern Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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  • Report this Comment On August 01, 2013, at 12:41 AM, eddietheinvestor wrote:

    SO is a solid company, well run and with an excellent and steady dividend. I am hesitant to buy now, but I certainly won't be selling.

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