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Wall Street expects a year-over-year increase in earnings on higher revenues when Southern Co. (SO - Free Report) reports results for the quarter ended June 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.

The earnings report, which is expected to be released on July 30, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.

While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise.

Zacks Consensus EstimateThis power company is expected to post quarterly earnings of $1.01 per share in its upcoming report, which represents a year-over-year change of +11%.

Revenues are expected to be $7.38 billion, up 5.9% from the year-ago quarter.

Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 0.43% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.

Price, Consensus and EPS Surprise

Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction).

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.

A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.

Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).

How Have the Numbers Shaped Up for Southern Co.?For Southern Co., the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +4.22%.

On the other hand, the stock currently carries a Zacks Rank of #3.

So, this combination indicates that Southern Co. will most likely beat the consensus EPS estimate.

Does Earnings Surprise History Hold Any Clue?Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.

For the last reported quarter, it was expected that Southern Co. would post earnings of $1.21 per share when it actually produced earnings of $1.32, delivering a surprise of +9.09%.

Over the last four quarters, the company has beaten consensus EPS estimates three times.

Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.

That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

Southern Co. appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Resources Investor Relations Journalists Agencies Client Login Send a Release News Products Contact , /PRNewswire/ -- Southern Company today announced a regular quarterly dividend of 76 cents per share on the company's common stock, payable September 8, 2026, to shareholders of record as of August 17, 2026.

Every quarter for 79 consecutive years, Southern Company has paid a dividend to its shareholders that is equal to or greater than the previous quarter.

About Southern Company
Southern Company (NYSE: SO) is a leading energy provider serving 9 million customers across the Southeast and beyond through its family of companies. The company has electric operating companies in three states, natural gas distribution companies in four states, a competitive generation company, a leading distributed energy solutions provider with national capabilities, a fiber optics network and telecommunications services.  Our uncompromising values ensure we put the needs of those we serve at the center of everything we do and are the key to our sustained success, driven by nearly 30,000 employees dedicated to delivering exceptional service. To learn more, visit www.southerncompany.com.

SOURCE Southern Company

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Key Takeaways Southern Company gained 8.7% in a month, outperforming its industry and the broader utility sector.SO sees AI-driven data center demand supporting long-term growth through contracted large-load agreements.SO faces risks from capital spending, financing costs, regulatory approvals and AI customer dependence. The Southern Company (SO - Free Report) shares have gained a little momentum over the past month, with its share price gaining 8.7%. Additionally, its performance outpaced both the Zacks Utility-Electric Power industry’s gain of 7.6% and the broader utility sector’s rise of nearly 5.9%. This outperformance signals a relative strength and highlights the company’s favorable positioning. With such momentum, investors have to be wondering, will the recent trend continue or is Southern Company due for a pullback?

SO's Stock Price Change Over the Past Month
Image Source: Zacks Investment Research

Founded in 1945 and headquartered in Atlanta, GA, Southern Company is one of the largest U.S. utilities, serving about 9 million electricity and natural gas customers. Its operations include regulated electric utilities, wholesale power generation and natural gas distribution. Through Southern Power, the company operates a diversified portfolio across gas, solar, wind and storage assets, supported by long-term power purchase agreements. Southern Company Gas serves 4.4 million customers through an extensive pipeline network and storage facilities across several U.S. states.

However, for investors, the key debate is whether SO’s strong run has more room to extend or if the rally has priced in much of the upside. With the company’s diversified portfolio strategy and recent tailwinds playing a critical role, the stock’s prospects warrant a closer examination before deciding whether to buy, hold or take profits.

Factors Driving the Performance of SO StockExceptional Data Center-Driven Demand Growth: Southern Company is benefiting from one of the strongest demand environments in the U.S. utility sector, fueled by AI-driven data center expansion. Management disclosed 23 GW of contracted or late-stage large-load demand, including more than 11 GW under executed agreements. The pipeline exceeds 75 GW, providing exceptional long-term visibility. Importantly, these contracts are backed by investment-grade hyperscalers and structured to recover the full cost of service, creating sustainable earnings growth without burdening existing customers.

Massive Capital Investment Opportunity: Southern Company is entering a multi-year investment cycle that should significantly expand its regulated asset base. Beyond the existing 10 GW generation program, Georgia Power has launched a proposal for an additional 2-6 GW of new generation resources. Southern Power is also investing in gas turbine uprates and evaluating further expansion opportunities. These projects can materially increase the rate base, supporting regulated earnings growth for years while strengthening the company's long-term competitive position.

Attractive Dividend Profile and Shareholder Returns: Income investors continue to benefit from Southern Company's remarkable dividend history. The board approved its 25th consecutive annual dividend increase, extending an extraordinary record of 79 consecutive years without reducing the annual dividend. This consistency reflects stable cash flows generated by regulated utility operations and disciplined capital allocation. For long-term investors seeking reliable income combined with moderate capital appreciation, SO remains among the most dependable dividend-paying utilities. Check Southern Company’s dividend history here.

SO’s Earnings Estimate

The Zacks Consensus Estimate for SO’s 2026 earnings per share indicates an increase of 6.5% year over year.

SO’s EPS Estimate Trend
Image Source: Zacks Investment Research

What’s Causing the Pressure on SO Stock?Significant Capital Spending Could Pressure Returns: Although growth opportunities are substantial, Southern Company must execute an enormous capital investment program over the next decade. The company is simultaneously expanding generation, transmission, battery storage and natural gas infrastructure while evaluating additional projects. Such large-scale investments expose shareholders to execution risk, construction delays and cost overruns. Any major project setbacks could negatively impact returns and increase pressure on the balance sheet despite management's disciplined planning approach.

Rising Financing Costs Remain a Headwind: Despite strong operating performance, higher financing expenses partially offset earnings growth during the first quarter. Utilities remain highly sensitive to interest rates because of their capital-intensive business models. If borrowing costs remain elevated or rise further, financing future infrastructure investments could become more expensive, reducing profitability and limiting the pace of earnings growth even as electricity demand continues to strengthen.

Heavy Dependence on AI and Large-Load Customers: A significant portion of Southern Company's long-term growth thesis depends on hyperscalers and data center developers continuing to build capacity across its service territories. While contracts include protections such as minimum bills and collateral requirements, a slowdown in AI infrastructure spending, project cancellations or delayed customer buildouts could reduce expected electricity demand. This concentration makes future growth increasingly tied to a single rapidly evolving industry.

Growth Opportunities Require Continued Regulatory Approval: Many of SO's future investment opportunities remain subject to regulatory approvals and competitive procurement processes. New generation assets, including projects under current RFPs, must be selected and authorized by state regulators before they can contribute to earnings. If regulators approve fewer company-owned projects, delay approvals or require alternative solutions, expected capital deployment and long-term earnings growth could fall short of management's current outlook.

Final Verdict on SO StockSouthern Company’s long-term strengths are balanced by meaningful execution risks. The company is well positioned to benefit from AI-driven data center demand, a sizable regulated capital investment pipeline and one of the most dependable dividend track records in the U.S. utility sector — all of which support steady earnings growth.

However, elevated capital spending, higher financing costs, regulatory approval uncertainties and increasing dependence on large-load customers could limit near-term upside. Therefore, the investors can retain this Zacks Rank #3 (Hold) stock and enjoy the benefits of regular dividends and earnings growth estimates. The new investors can wait and look for a better entry point.

Key PicksInvestors interested in the utility sector might look at some better-ranked stocks like Pampa Energía S.A. (PAM - Free Report) , Enel SpA (ENLAY - Free Report) and Energias de Portugal (EDPFY - Free Report) . While PAM sports a Zacks Rank #1 (Strong Buy) at present, ENLAY and EDPFY carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Argentina-based Pampa Energia is the largest fully integrated electricity company engaged in the generation, transmission and distribution of electricity. The Zacks Consensus Estimate for PAM’s 2026 earnings indicates 39.8% year-over-year growth.

Enel is an electricity operator in Italy, which engages in the generation, distribution and sale of electricity. The Zacks Consensus Estimate for ENLAY’s 2026 earnings indicates 93.2% year-over-year growth.

Energias de Portugal ranks among Europe's major electricity operators, as well as being one of Portugal's largest business groups. It is a Portuguese electric utility company with operations in Europe, the Americas and Asia. EDPFY specializes in renewable energy generation, grid management and electricity supply, aiming to transition toward a low-carbon future.