Electric utility firm
) reported fourth quarter 2012 earnings per share of 44 cents,
ahead of the Zacks Consensus Estimate of 39 cents and the
year-ago period profit of 30 cents amid higher energy use and a
drop in costs.
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The Atlanta, Georgia-based power supplier's quarterly revenue -
at $3,703.0 million - came slightly higher than the fourth
quarter 2011 level of $3,696.0 million but failed to match up to
the Zacks Consensus Estimate of $4,465.0 million.
For its fiscal year ended Dec 31, 2012, Southern Company reported
income (excluding the impact of an insurance claim) of $2.68 per
share, above the Zacks Consensus Estimate of $2.62 and the 2011
earnings of $2.57 per share. However, revenues of $16,537.0
million were 6.3% below the year ago period and were also unable
to beat the Zacks Consensus Estimate of $17,467.0 million.
Below-normal temperatures across Southern's core Southeast market
boosted electricity demand for heating. This brought about an
upward movement in overall electricity sales and usage. Total
electricity sales during the fourth quarter improved 2.4% from
the same period last year.
Total retail sales rose by 2.6%, reflecting higher demand from
residential customers, which increased by 6.6%. Commercial sales
registered a year-over-year upward movement of 0.7%.
In particular, industrial sales were up 1.2%, lifting Southern's
fourth quarter results. With approximately a third of the
company's total retail sales coming from industrial customers,
direction of the economy significantly affects the fortunes of
Southern, as compared to other utilities that are less dependent
on the industrial component.
The company's operations and maintenance expense decreased 11.5%
year over year, the second quarterly decline following two
successive increases. Additionally, Southern's total operating
expense for the period, at $2,889.0 million, was approximately
7.0% lower than the prior-year level.
Management indicated that it continues to see positive
indications of economic growth in the Southeast region but
admitted delayed decision making related to expansion and hiring
on the back of uncertainty over longer-term fiscal issues.
Stocks to Consider
Southern Company currently retains a Zacks Rank #4 (Sell),
implying that it is expected to underperform the broader U.S.
equity market over the next one to three months.
However, there are certain other electric utility stocks like
Integrys Energy Group Inc.
Wisconsin Energy Corp.
) that offer tremendous value and are worth buying now. All these
companies sport a Zacks Rank #1 (Strong Buy).