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.
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 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.
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.)
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.
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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