SO · Q2 FY2026
SOUTHERN CO Q2 FY2026 earnings analysis
By SageNoodle ResearchNeutral
| Metric | Actual | Estimate | Result |
|---|---|---|---|
| Revenue | $6.977B | $6.973B (yr ago) | Beat |
| EPS | $1.03 reported | $0.80 (yr ago) | Beat |
| Free Cash Flow | Not disclosed; not meaningful for this capital-intensive utility | Not disclosed (yr ago) | Miss |
| Gross Margin | Not meaningful for this utility | Not meaningful (yr ago) | Miss |
| Operating Margin | 19.7% pre-tax margin | 16.4% pre-tax margin (yr ago) | Beat |
What changed
Revenue was effectively flat at $6.977 billion, but reported EPS increased 28.8% to $1.03 and pre-tax margin expanded to 19.7% from 16.4%. The improvement came from regulated utility investment, customer usage and growth, equity-method earnings and lower taxes, while accelerated depreciation and a larger share count remained offsets.
Impact on the investment thesis
There was no prior SageNoodle fair value to revise. We establish fair value at $88.20 per share; the quarter supports the earnings base but does not justify a higher multiple because revenue was flat and capital requirements remain substantial.