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Southern Company Misses Where it Counts

By Seth Jayson - Updated Apr 10, 2017 at 1:44PM

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Just the facts, Fool.

Southern Company (NYSE: SO) reported earnings on April 24. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Southern Company beat expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue increased. Non-GAAP earnings per share grew significantly. GAAP earnings per share contracted significantly.

Gross margins increased, operating margins grew, net margins shrank.

Revenue details
Southern Company recorded revenue of $3.90 billion. The four analysts polled by S&P Capital IQ hoped for a top line of $3.79 billion on the same basis. GAAP reported sales were 8.1% higher than the prior-year quarter's $3.60 billion.

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

EPS details
EPS came in at $0.49. The 14 earnings estimates compiled by S&P Capital IQ averaged $0.50 per share. Non-GAAP EPS of $0.49 for Q1 were 17% higher than the prior-year quarter's $0.42 per share. GAAP EPS of $0.09 for Q1 were 79% lower than the prior-year quarter's $0.42 per share.

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

Margin details
For the quarter, gross margin was 40.2%, 50 basis points better than the prior-year quarter. Operating margin was 22.2%, 90 basis points better than the prior-year quarter. Net margin was 2.5%, 770 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $4.33 billion. On the bottom line, the average EPS estimate is $0.70.

Next year's average estimate for revenue is $17.69 billion. The average EPS estimate is $2.77.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,027 members out of 1,086 rating the stock outperform, and 59 members rating it underperform. Among 326 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 317 give Southern Company a green thumbs-up, and nine 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 $45.23.

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The Southern Company
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