Southern Company Reports First-Quarter 2021 Earnings

Rhea-AI Summary

Southern Company reported Q1 2021 earnings of $1.14 billion or $1.07 per share, a significant increase from $868 million or 82 cents per share in Q1 2020. Excluding certain items, adjusted earnings were $1.04 billion or 98 cents per share, up from $825 million or 78 cents. Operating revenues rose 17.8% to $5.9 billion, driven by colder weather and higher residential sales. The company highlights robust customer growth and recovery from the pandemic as key positive factors.

Positive

• Q1 2021 earnings increased to $1.14 billion from $868 million in Q1 2020.
• Adjusted earnings rose to $1.04 billion, up from $825 million year-over-year.
• Operating revenues grew 17.8% to $5.9 billion, mainly due to colder weather and higher fuel costs.
• Strong customer growth and recovery in service areas post-COVID-19.

Negative

• Lower commercial and industrial sales compared to previous periods.

ATLANTA, April 29, 2021 /PRNewswire/ -- Southern Company today reported first-quarter 2021 earnings of $1.14 billion, or $1.07 per share, compared with $868 million, or 82 cents per share, in the first quarter of 2020. 

Excluding the items described under "Net Income – Excluding Items" in the table below, Southern Company earned $1.04 billion, or 98 cents per share, during the first quarter of 2021, compared with $825 million, or 78 cents per share, during the first quarter of 2020.  

Non-GAAP Financial Measures		Three Months Ended March
Net Income - Excluding Items (in millions)		2021	2020
Net Income - As Reported		$1,135	$868
Less:
Estimated Loss on Plants Under Construction		(45)	(3)
Tax Impact		11	1
Acquisition and Disposition Impacts		-	38
Tax Impact		-	(16)
Wholesale Gas Services		166	31
Tax Impact		(40)	(8)
Net Income – Excluding Items		$1,043	$825
Average Shares Outstanding – (in millions)		1,060	1,057
Basic Earnings Per Share – Excluding Items		$0.98	$0.78

NOTE:	For more information regarding these non-GAAP adjustments, see the footnotes accompanying the Financial Highlights page of the earnings package.

Earnings drivers for the first quarter of 2021, as compared with 2020, were robust customer growth, higher residential sales and colder weather, partially offset by lower commercial and industrial sales.

"Southern Company experienced a strong start to the year," said Chairman, President and CEO, Thomas A. Fanning. "The economies in our service territories are starting to recover from the COVID-19 pandemic," added Fanning. "Customer demand is improving faster than we anticipated. Importantly, programs we implemented to keep customers connected during the pandemic – including alternative payment arrangements -- have helped those in need of assistance as we have continued to reliably provide for their energy needs. I am extremely proud of our employees and the ways we have partnered with our communities during this time."

First-quarter 2021 operating revenues were $5.9 billion, compared with $5.0 billion for the first quarter of 2020, an increase of 17.8 percent. This increase was primarily due to colder weather and higher fuel costs.

Southern Company's first-quarter earnings slides with supplemental financial information are available at http://investor.southerncompany.com.

Southern Company's financial analyst call will begin at 1 p.m. Eastern Time today, during which Fanning and Chief Financial Officer Andrew W. Evans will discuss earnings and provide a general business update, including an update on the Vogtle units 3 and 4 construction project. Investors, media and the public may listen to a live webcast of the call and view associated slides at http://investor.southerncompany.com/webcasts. A replay of the webcast will be available on the site for 12 months.

About Southern Company

Southern Company (NYSE: SO) is a leading energy company serving 9 million customers through its subsidiaries. The company provides clean, safe, reliable and affordable energy through electric operating companies in three states, natural gas distribution companies in four states, a competitive generation company serving wholesale customers across America, a leading distributed energy infrastructure company, a fiber optics network and telecommunications services. Southern Company brands are known for excellent customer service, high reliability and affordable prices below the national average. For more than a century, we have been building the future of energy and developing the full portfolio of energy resources, including carbon-free nuclear, advanced carbon capture technologies, natural gas, renewables, energy efficiency and storage technology. Through an industry-leading commitment to innovation and a low-carbon future, Southern Company and its subsidiaries develop the customized energy solutions our customers and communities require to drive growth and prosperity. Our uncompromising values ensure we put the needs of those we serve at the center of everything we do and govern our business to the benefit of our world. Our corporate culture and hiring practices have been recognized nationally by the U.S. Department of Defense, G.I. Jobs magazine, DiversityInc, Black Enterprise, Forbes and the Women's Choice Award. To learn more, visit www.southerncompany.com.

 

Southern Company
Financial Highlights
(In Millions of Dollars Except Earnings Per Share)
	Three Months Ended March
Net Income–As Reported (See Notes)	2021				2020
Traditional Electric Operating Companies	$	756			$	642
Southern Power	97				75
Southern Company Gas	398				275
Total	1,251				992
Parent Company and Other	(116)				(124)
Net Income–As Reported	$	1,135			$	868
Basic Earnings Per Share1	$	1.07			$	0.82
Average Shares Outstanding (in millions)	1,060				1,057
End of Period Shares Outstanding (in millions)	1,059				1,056
Non-GAAP Financial Measures	Three Months Ended March
Net Income–Excluding Items (See Notes)	2021				2020
Net Income–As Reported	$	1,135			$	868
Less:
Estimated Loss on Plants Under Construction2	(45)				(3)
Tax Impact	11				1
Acquisition and Disposition Impacts3	—				38
Tax Impact	—				(16)
Wholesale Gas Services4	166				31
Tax Impact	(40)				(8)
Net Income–Excluding Items	$	1,043			$	825
Basic Earnings Per Share–Excluding Items	$	0.98			$	0.78
-See Notes on the following page.

Southern Company Financial Highlights
Notes
(1)	Dilution is not material in any period presented. Diluted earnings per share was $1.06 and $0.81 for the three months ended March 31, 2021 and 2020, respectively.
(2)	Earnings for the three months ended March 31, 2021 include a charge of $48 million pre tax ($36 million after tax) for an estimated probable loss on Georgia Power Company's construction of Plant Vogtle Units 3 and 4.  Further charges may occur; however, the amount and timing of any such charges are uncertain.  Earnings for the three months ended March 31, 2021 and 2020 include charges (net of salvage proceeds), associated legal expenses (net of insurance recoveries), and tax impacts related to Mississippi Power Company's integrated coal gasification combined cycle facility project in Kemper County, Mississippi.  Mississippi Power Company expects to incur additional pre-tax period costs to complete dismantlement of the abandoned gasifier-related assets and site restoration activities, including related costs for compliance and safety, asset retirement obligation accretion, and property taxes, totaling $10 million to $20 million annually through 2025.
(3)	Earnings for the three months ended March 31, 2020 primarily include a $39 million pre-tax ($23 million after-tax) gain on the sale of Southern Power Company's Plant Mankato. Further impacts may be recorded in future periods in connection with acquisition and disposition activity.
(4)	Earnings for the three months ended March 31, 2021 and 2020 include Wholesale Gas Services business results. Presenting earnings and earnings per share excluding Wholesale Gas Services provides an additional measure of operating performance that excludes the volatility resulting from mark-to-market and lower of weighted average cost or current market price accounting adjustments.

 

Southern Company
Significant Factors Impacting EPS
	Three Months Ended March
	2021				2020				Change
Earnings Per Share–
As Reported1 (See Notes)	$	1.07			$	0.82			$	0.25
Significant Factors:
Traditional Electric Operating Companies									$	0.11
Southern Power									0.02
Southern Company Gas									0.12
Parent Company and Other									—
Increase in Shares									—
Total–As Reported									$	0.25
	Three Months Ended March
Non-GAAP Financial Measures	2021				2020				Change
Earnings Per Share–
Excluding Items (See Notes)	$	0.98			$	0.78			$	0.20
Total–As Reported									$	0.25
Less:
Estimated Loss on Plants Under Construction2									(0.03)
Acquisition and Disposition Impacts3									(0.02)
Wholesale Gas Services4									0.10
Total–Excluding Items									$	0.20
- See Notes on the following page.

Southern Company Significant Factors Impacting EPS
Notes
(1)	Dilution is not material in any period presented. Diluted earnings per share was $1.06 and $0.81 for the three months ended March 31, 2021 and 2020, respectively.
(2)	Earnings for the three months ended March 31, 2021 include a charge of $48 million pre tax ($36 million after tax) for an estimated probable loss on Georgia Power Company's construction of Plant Vogtle Units 3 and 4.  Further charges may occur; however, the amount and timing of any such charges are uncertain.  Earnings for the three months ended March 31, 2021 and 2020 include charges (net of salvage proceeds), associated legal expenses (net of insurance recoveries), and tax impacts related to Mississippi Power Company's integrated coal gasification combined cycle facility project in Kemper County, Mississippi.  Mississippi Power Company expects to incur additional pre-tax period costs to complete dismantlement of the abandoned gasifier-related assets and site restoration activities, including related costs for compliance and safety, asset retirement obligation accretion, and property taxes, totaling $10 million to $20 million annually through 2025.
(3)	Earnings for the three months ended March 31, 2020 primarily include a $39 million pre-tax ($23 million after-tax) gain on the sale of Southern Power Company's Plant Mankato. Further impacts may be recorded in future periods in connection with acquisition and disposition activity.
(4)	Earnings for the three months ended March 31, 2021 and 2020 include Wholesale Gas Services business results. Presenting earnings and earnings per share excluding Wholesale Gas Services provides an additional measure of operating performance that excludes the volatility resulting from mark-to-market and lower of weighted average cost or current market price accounting adjustments.

 

	Southern Company
	EPS Earnings Analysis
	Three Months Ended March 2021 vs. March 2020
	Description	Cents
	Retail Sales	(1)¢
	Retail Revenue Impacts	2
	Weather	6
	Wholesale & Other Operating Revenues	4
	Depreciation and Amortization, Interest Expense, Other	3
	Total Traditional Electric Operating Companies	14¢
	Southern Power	4
	Southern Company Gas	2
	Total Change in EPS (Excluding Items)	20¢
	Estimated Loss on Plants Under Construction1	(3)
	Acquisition and Disposition Impacts2	(2)
	Wholesale Gas Services3	10
	Total Change in EPS (As Reported)	25¢
	- See Notes on the following page.

Southern Company EPS Earnings Analysis
Notes
(1)	Earnings for the three months ended March 31, 2021 include a charge of $48 million pre tax ($36 million after tax) for an estimated probable loss on Georgia Power Company's construction of Plant Vogtle Units 3 and 4.  Further charges may occur; however, the amount and timing of any such charges are uncertain.  Earnings for the three months ended March 31, 2021 and 2020 include charges (net of salvage proceeds), associated legal expenses (net of insurance recoveries), and tax impacts related to Mississippi Power Company's integrated coal gasification combined cycle facility project in Kemper County, Mississippi.  Mississippi Power Company expects to incur additional pre-tax period costs to complete dismantlement of the abandoned gasifier-related assets and site restoration activities, including related costs for compliance and safety, asset retirement obligation accretion, and property taxes, totaling $10 million to $20 million annually through 2025.
(2)	Earnings for the three months ended March 31, 2020 primarily include a $39 million pre-tax ($23 million after-tax) gain on the sale of Southern Power Company's Plant Mankato. Further impacts may be recorded in future periods in connection with acquisition and disposition activity.
(3)	Earnings for the three months ended March 31, 2021 and 2020 include Wholesale Gas Services business results. Presenting earnings and earnings per share excluding Wholesale Gas Services provides an additional measure of operating performance that excludes the volatility resulting from mark-to-market and lower of weighted average cost or current market price accounting adjustments.

 

Southern Company
Consolidated Earnings
As Reported
(In Millions of Dollars)
	Three Months Ended March
	2021				2020				Change
Income Account-
Retail Electric Revenues-
Fuel	$	838			$	677			$	161
Non-Fuel	2,504				2,401				103
Wholesale Electric Revenues	545				418				127
Other Electric Revenues	170				151				19
Natural Gas Revenues	1,694				1,249				445
Other Revenues	159				122				37
Total Revenues	5,910				5,018				892
Fuel and Purchased Power	1,055				817				238
Cost of Natural Gas	583				439				144
Cost of Other Sales	82				55				27
Non-Fuel O&M	1,372				1,296				76
Depreciation and Amortization	871				857				14
Taxes Other Than Income Taxes	345				330				15
Estimated Loss on Plant Vogtle Units 3 and 4	48				—				48
(Gain) Loss on Dispositions, net	(44)				(39)				(5)
Total Operating Expenses	4,312				3,755				557
Operating Income	1,598				1,263				335
Allowance for Equity Funds Used During Construction	46				34				12
Earnings from Equity Method Investments	45				42				3
Interest Expense, Net of Amounts Capitalized	450				456				(6)
Other Income (Expense), net	58				103				(45)
Income Taxes	190				145				45
Net Income	1,107				841				266
Less:
Dividends on Preferred Stock of Subsidiaries	4				4				—
Net Loss Attributable to Noncontrolling Interests	(32)				(31)				(1)
NET INCOME ATTRIBUTABLE TO SOUTHERN COMPANY	$	1,135			$	868			$	267

Notes
- Certain prior year data may have been reclassified to conform with current year presentation.

 

Southern Company
Kilowatt-Hour Sales and Customers
(In Millions of KWHs)
	Three Months Ended March
	2021					2020							Change						Weather Adjusted Change
Kilowatt-Hour Sales-
Total Sales	46,422					44,263							4.9				%
Total Retail Sales-	34,651					34,045							1.8				%		(1.6)		%
Residential	12,040					10,866							10.8				%		1.1		%
Commercial	10,743					10,939							(1.8)				%		(3.1)		%
Industrial	11,708					12,066							(3.0)				%		(3.0)		%
Other	160					174							(7.7)				%		(8.2)		%
Total Wholesale Sales	11,771					10,218							15.2				%		N/A
(In Thousands of Customers)
	Period Ended March
	2021					2020							Change
Regulated Utility Customers-
Total Utility Customers-	8,673					8,578							1.1%
Total Traditional Electric	4,338					4,280							1.4%
Southern Company Gas	4,335					4,298							0.9%

 

Southern Company
Financial Overview
As Reported
(In Millions of Dollars)
		Three Months Ended March
		2021							2020							% Change
Southern Company –
Operating Revenues		$	5,910						$	5,018						17.8				%
Earnings Before Income Taxes		1,297							986							31.5				%
Net Income Available to Common		1,135							868							30.8				%
Alabama Power –
Operating Revenues		$	1,559						$	1,351						15.4				%
Earnings Before Income Taxes		473							368							28.5				%
Net Income Available to Common		359							280							28.2				%
Georgia Power –
Operating Revenues		$	1,970						$	1,825						7.9				%
Earnings Before Income Taxes		369							347							6.3				%
Net Income Available to Common		351							331							6.0				%
Mississippi Power –
Operating Revenues		$	307						$	277						10.8				%
Earnings Before Income Taxes		49							38							28.9				%
Net Income Available to Common		45							32							40.6				%
Southern Power –
Operating Revenues		$	440						$	375						17.3				%
Earnings Before Income Taxes		55							51							7.8				%
Net Income Available to Common		97							75							29.3				%
Southern Company Gas –
Operating Revenues		$	1,694						$	1,249						35.6				%
Earnings Before Income Taxes		519							354							46.6				%
Net Income Available to Common		398							275							44.7				%

Notes
- See Financial Highlights pages for discussion of certain significant items occurring during the periods

 

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SOURCE Southern Company

FAQ

What were Southern Company's Q1 2021 earnings?

Southern Company reported Q1 2021 earnings of $1.14 billion, or $1.07 per share.

How did Southern Company's Q1 2021 performance compare to Q1 2020?

In Q1 2020, Southern Company earned $868 million, or 82 cents per share; Q1 2021 shows substantial growth.

What drove Southern Company's revenue increase in Q1 2021?

The revenue increase in Q1 2021 was driven by colder weather and higher residential sales.

What was the adjusted earnings per share for Southern Company in Q1 2021?

The adjusted earnings per share for Q1 2021 were $0.98, up from $0.78 in Q1 2020.

When will Southern Company's financial analyst call take place?

The financial analyst call is scheduled for 1 p.m. Eastern Time on April 29, 2021.