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.
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 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.
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.)
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.
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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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, backed by a real-money portfolio. 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.