Falling revenue did not prevent S&P 500 (NYSE:SPY) component Southern Company (NYSE:SO) from reporting a profit boost in the second quarter. Southern Company, through its operating companies, provides electric service in four Southeastern states.
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Southern Company Earnings Cheat Sheet
Results: Net income for Southern Company rose to $639 million (71 cents per share) vs. $620 million (71 cents per share) in the same quarter a year earlier. This marks a rise of 3.1% from the year-earlier quarter.
Revenue: Fell 7.5% to $4.18 billion from the year-earlier quarter.
Actual vs. Wall St. Expectations: Southern Company beat the mean analyst estimate of 68 cents per share. It fell short of the average revenue estimate of $4.74 billion.
Quoting Management: Southern Company Chairman, President and CEO Thomas A. Fanning pointed to strong residential customer growth as the latest indicator of a continuing economic recovery in the Southeast. “In the first six months of 2012, our traditional operating companies have already added 20,000 new residential customers – more than we originally projected for the entire year,” said Fanning. “And with new economic development successes – representing more than 7,200 new jobs announced in just the last three months – the future continues to look bright for our region.”
Revenue has been on the decline for three quarters in a row. In the first quarter, revenue declined 10.2% to $3.6 billion while the figure fell 2% in the fourth quarter of the last fiscal year from the year earlier.
The company topped expectations last quarter after falling short of forecasts in the first quarter with net income of 42 cents versus a mean estimate of net income of 46 cents per share.
Last quarter’s profit increase comes after net income dropped in the prevoius quarter. In the first quarter, net income declined 12.3% to $384 million.
Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the third quarter has moved up from $1.11 a share to $1.15 over the last ninety days. For the fiscal year, the average estimate has moved down from $2.66 a share to $2.64 over the last ninety days.
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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)
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