Southern Company reports second-quarter 2022 earnings

Rhea-AI Summary

Southern Company reported impressive second-quarter earnings of $1.1 billion, or $1.04 per share, significantly up from $372 million, or 35 cents per share, in 2021. For the first half of 2022, earnings reached $2.1 billion, or $2.01 per share, compared to $1.5 billion, or $1.42 per share, last year. Operating revenues surged to $7.2 billion, a 38.6% increase, attributed to higher fuel costs and increased energy usage. The company noted stronger performance from its generation fleet during a record-setting heatwave in June.

Positive

• Q2 earnings of $1.1 billion, a significant increase of 195% from $372 million in 2021.
• Operating revenues of $7.2 billion, up 38.6% compared to $5.2 billion in Q2 2021.
• For the first half of 2022, earnings per share reached $2.01, compared to $1.42 for the same period in 2021.

Negative

• Higher non-fuel operations and maintenance costs impacting profit margins.

ATLANTA , July 28, 2022 /PRNewswire/ -- Southern Company today reported second-quarter earnings of $1.1 billion, or $1.04 per share, in 2022 compared with $372 million, or 35 cents per share, in 2021. For the six months ended June 30, 2022, Southern Company reported earnings of $2.1 billion, or $2.01 per share, compared with $1.5 billion, or $1.42 per share, for the same period in 2021.

Excluding the items described under "Net Income – Excluding Items" in the table below, Southern Company earned $1.1 billion, or $1.07 per share, during the second quarter of 2022, compared with $891 million, or 84 cents per share, during the second quarter of 2021.  For the six months ended June 30, 2022, excluding these items, Southern Company earned $2.2 billion, or $2.05 per share, compared with $1.9 billion, or $1.82 per share, for the same period in 2021.

Non-GAAP Financial Measures		Three Months Ended June			Year-to-Date June
Net Income - Excluding Items (in millions)		2022	2021		2022	2021
Net Income - As Reported		$1,107	$372		$2,139	$1,508
Less:
Estimated Loss on Plants Under Construction		(54)	(462)		(55)	(507)
Tax Impact		13	118		13	130
Acquisition and Disposition Impacts		5	1		5	1
Tax Impact		(1)	-		(1)	-
Wholesale Gas Services		-	(147)		-	19
Tax Impact		-	35		-	(5)
Asset Impairments		-	(89)		-	(89)
Tax Impact		-	25		-	25
Net Income – Excluding Items		$1,144	$891		$2,177	$1,934
Average Shares Outstanding – (in millions)		1,065	1,061		1,064	1,060
Basic Earnings Per Share – Excluding Items		$1.07	$0.84		$2.05	$1.82

 

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

Adjusted earnings drivers for the second quarter 2022, as compared with the same period in 2021, were higher revenues associated with increased usage, changes in rates and pricing, and warmer than normal weather at our regulated electric utilities, partially offset by higher non-fuel operations and maintenance costs, reflecting a rising cost environment and our long-term commitments to reliability and resilience.

Second-quarter 2022 operating revenues were $7.2 billion, compared with $5.2 billion for the second quarter of 2021, an increase of 38.6 percent. For the six months ended June 30, 2022, operating revenues were $13.9 billion, compared with $11.1 billion for the corresponding period in 2021, an increase of 24.7 percent.  These increases were primarily due to higher fuel costs and warmer weather in the second quarter 2022.

"Southern Company's generation fleet and power delivery system performed exceedingly well during the second quarter, which included the second hottest June in 50 years" said Chairman, President and CEO, Thomas A. Fanning. "I am proud of our team's continued outstanding performance during times when our customers need us most."

Southern Company's second-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 Daniel S. Tucker will discuss earnings and provide a general business update. Investors, media and the public may listen to a live webcast of the call and view associated slides at https://investor.southerncompany.com/events-and-presentations/default.aspx. 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.

 

Page 3
Southern Company
Financial Highlights
(In Millions of Dollars Except Earnings Per Share)
	Three Months Ended June				Year-To-Date June
Net Income–As Reported (See Notes)	2022		2021		2022		2021
Traditional Electric Operating Companies	$          1,036		$              511		$          1,811		$          1,267
Southern Power	98		36		170		133
Southern Company Gas	115		(65)		433		333
Total	1,249		482		2,414		1,733
Parent Company and Other	(142)		(110)		(275)		(225)
Net Income–As Reported	$          1,107		$              372		$          2,139		$          1,508
Basic Earnings Per Share1	$             1.04		$             0.35		$             2.01		$             1.42
Average Shares Outstanding (in millions)	1,065		1,061		1,064		1,060
End of Period Shares Outstanding (in millions)					1,063		1,059
Non-GAAP Financial Measures	Three Months Ended June				Year-To-Date June
Net Income–Excluding Items (See Notes)	2022		2021		2022		2021
Net Income–As Reported	$          1,107		$              372		$          2,139		$          1,508
Less:
Estimated Loss on Plants Under Construction2	(54)		(462)		(55)		(507)
Tax Impact	13		118		13		130
Acquisition and Disposition Impacts	5		1		5		1
Tax Impact	(1)		—		(1)		—
Wholesale Gas Services3	—		(147)		—		19
Tax Impact	—		35		—		(5)
Asset Impairments4	—		(89)		—		(89)
Tax Impact	—		25		—		25
Net Income–Excluding Items	$          1,144		$              891		$          2,177		$          1,934
Basic Earnings Per Share–Excluding Items	$             1.07		$             0.84		$             2.05		$             1.82
- See Notes on the following page.

 

Page 4
Southern Company
Financial Highlights
Notes
(1)	Dilution is not material in any period presented. Diluted earnings per share was $1.03 and $2.00 for the three and six months ended June 30, 2022 and was $0.35 and $1.41 for the three and six months ended June 30, 2021, respectively.
(2)	Earnings for the three and six months ended June 30, 2022 include a charge of $52 million pre tax ($39 million after tax), earnings for the three months ended June 30, 2021 include a charge of $460 million pre tax ($343 million after tax), and earnings for the six months ended June 30, 2021 include charges totaling $508 million pre tax ($379 million after tax) for estimated probable losses 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 and six months ended June 30, 2022 and 2021 also 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, net of salvage, totaling $10 million to $20 million annually through 2025.
(3)	Earnings for the three and six months ended June 30, 2021 include results of the Wholesale Gas Services business, which was sold on July 1, 2021. Presenting earnings and earnings per share excluding Wholesale Gas Services provided an additional measure of operating performance that excluded the volatility resulting from mark-to-market and lower of weighted average cost or current market price accounting adjustments.
(4)	Earnings for the three and six months ended June 30, 2021 include pre-tax impairment charges of $82 million ($58 million after tax) related to Southern Company Gas' investment in the PennEast Pipeline project and $7 million ($6 million after tax) related to a leveraged lease investment. Impairment charges may occur in the future; however, the amount and timing of any such charges are uncertain.

 

Page 5
Southern Company
Significant Factors Impacting EPS
	Three Months Ended June						Year-To-Date June
	2022		2021		Change		2022		2021		Change
Earnings Per Share–
As Reported1 (See Notes)	$   1.04		$   0.35		$    0.69		$   2.01		$   1.42		$    0.59
Significant Factors:
Traditional Electric Operating Companies					$    0.49						$    0.51
Southern Power					0.06						0.04
Southern Company Gas					0.17						0.09
Parent Company and Other					(0.03)						(0.04)
Increase in Shares					—						(0.01)
Total–As Reported					$    0.69						$    0.59
	Three Months Ended June						Year-To-Date June
Non-GAAP Financial Measures	2022		2021		Change		2022		2021		Change
Earnings Per Share–
Excluding Items (See Notes)	$   1.07		$   0.84		$    0.23		$   2.05		$   1.82		$    0.23
Total–As Reported					$    0.69						$    0.59
Less:
Estimated Loss on Plants Under Construction2					0.28						0.31
Acquisition and Disposition Impacts					0.01						—
Wholesale Gas Services3					0.11						(0.01)
Asset Impairments4					0.06						0.06
Total–Excluding Items					$    0.23						$    0.23
- See Notes on the following page.

 

Page 6
Southern Company
Significant Factors Impacting EPS
Notes
(1)	Dilution is not material in any period presented. Diluted earnings per share was $1.03 and $2.00 for the three and six months ended June 30, 2022 and was $0.35 and $1.41 for the three and six months ended June 30, 2021, respectively.
(2)	Earnings for the three and six months ended June 30, 2022 include a charge of $52 million pre tax ($39 million after tax), earnings for the three months ended June 30, 2021 include a charge of $460 million pre tax ($343 million after tax), and earnings for the six months ended June 30, 2021 include charges totaling $508 million pre tax ($379 million after tax) for estimated probable losses 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 and six months ended June 30, 2022 and 2021 also 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, net of salvage, totaling $10 million to $20 million annually through 2025.
(3)	Earnings for the three and six months ended June 30, 2021 include results of the Wholesale Gas Services business, which was sold on July 1, 2021. Presenting earnings and earnings per share excluding Wholesale Gas Services provided an additional measure of operating performance that excluded the volatility resulting from mark-to-market and lower of weighted average cost or current market price accounting adjustments.
(4)	Earnings for the three and six months ended June 30, 2021 include pre-tax impairment charges of $82 million ($58 million after tax) related to Southern Company Gas' investment in the PennEast Pipeline project and $7 million ($6 million after tax) related to a leveraged lease investment. Impairment charges may occur in the future; however, the amount and timing of any such charges are uncertain.

 

Page 7
Southern Company
EPS Earnings Analysis
Description	Three Months Ended June 2022 vs. 2021		Year-To-Date June 2022 vs. 2021
Retail Sales	6¢		7¢
Retail Revenue Impacts	16		21
Weather	10		11
Wholesale & Other Operating Revenues	1		1
Non-Fuel O&M(*)	(5)		(14)
Depreciation and Amortization, Interest Expense, Other	(3)		(2)
Income Taxes	(4)		(4)
Total Traditional Electric Operating Companies	21¢		20¢
Southern Power	6		4
Southern Company Gas	—		5
Parent and Other	(4)		(5)
Increase in Shares	—		(1)
Total Change in EPS (Excluding Items)	23¢		23¢
Estimated Loss on Plants Under Construction1	28		31
Acquisition and Disposition Impacts	1		—
Wholesale Gas Services2	11		(1)
Asset Impairments3	6		6
Total Change in EPS (As Reported)	69¢		59¢
(*) Includes non-service cost-related benefits income
- See additional Notes on the following page.

 

Page 8
Southern Company
EPS Earnings Analysis
Notes
(1)	Earnings for the three and six months ended June 30, 2022 include a charge of $52 million pre tax ($39 million after tax), earnings for the three months ended June 30, 2021 include a charge of $460 million pre tax ($343 million after tax), and earnings for the six months ended June 30, 2021 include charges totaling $508 million pre tax ($379 million after tax) for estimated probable losses 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 and six months ended June 30, 2022 and 2021 also 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, net of salvage, totaling $10 million to $20 million annually through 2025.
(2)	Earnings for the three and six months ended June 30, 2021 include results of the Wholesale Gas Services business, which was sold on July 1, 2021. Presenting earnings and earnings per share excluding Wholesale Gas Services provided an additional measure of operating performance that excluded the volatility resulting from mark-to-market and lower of weighted average cost or current market price accounting adjustments.
(3)	Earnings for the three and six months ended June 30, 2021 include pre-tax impairment charges of $82 million ($58 million after tax) related to Southern Company Gas' investment in the PennEast Pipeline project and $7 million ($6 million after tax) related to a leveraged lease investment. Impairment charges may occur in the future; however, the amount and timing of any such charges are uncertain.

 

Page 9
Southern Company
Consolidated Earnings
As Reported
(In Millions of Dollars)
	Three Months Ended June						Year-To-Date June
	2022		2021		Change		2022		2021		Change
Retail Electric Revenues-
Fuel	$  1,608		$      875		$      733		$  2,622		$  1,712		$      910
Non-Fuel	3,181		2,724		457		5,780		5,229		551
Wholesale Electric Revenues	937		546		391		1,601		1,091		510
Other Electric Revenues	192		175		17		370		346		24
Natural Gas Revenues	1,083		677		406		3,140		2,371		769
Other Revenues	205		201		4		341		359		(18)
Total Operating Revenues	7,206		5,198		2,008		13,854		11,108		2,746
Fuel and Purchased Power	2,123		1,065		1,058		3,466		2,120		1,346
Cost of Natural Gas	452		231		221		1,546		814		732
Cost of Other Sales	114		103		11		183		185		(2)
Non-Fuel O&M	1,558		1,438		120		3,075		2,810		265
Depreciation and Amortization	913		891		22		1,805		1,762		43
Taxes Other Than Income Taxes	349		313		36		721		657		64
Estimated Loss on Plant Vogtle Units 3 and 4	52		460		(408)		52		508		(456)
Gain on Dispositions, net	(10)		(11)		1		(33)		(54)		21
Total Operating Expenses	5,551		4,490		1,061		10,815		8,802		2,013
Operating Income	1,655		708		947		3,039		2,306		733
Allowance for Equity Funds Used During Construction	53		45		8		104		90		14
Earnings (Loss) from Equity Method Investments	34		(40)		74		80		5		75
Interest Expense, Net of Amounts Capitalized	488		450		38		950		901		49
Other Income (Expense), net	139		101		38		283		160		123
Income Taxes (Benefit)	304		(12)		316		477		178		299
Net Income	1,089		376		713		2,079		1,482		597
Dividends on Preferred Stock of Subsidiaries	4		4		—		7		7		—
Net Loss Attributable to Noncontrolling Interests	(22)		—		(22)		(67)		(33)		(34)
NET INCOME ATTRIBUTABLE TO SOUTHERN COMPANY	$  1,107		$      372		$      735		$  2,139		$  1,508		$      631

 

Notes

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

 

Page 10
Southern Company
Kilowatt-Hour Sales and Customers
(In Millions of KWHs)
	Three Months Ended June								Year-To-Date June
	2022		2021		Change		Weather Adjusted Change		2022		2021		Change		Weather Adjusted Change
Kilowatt-Hour Sales-
Total Sales	51,541		46,020		12.0 %				100,269		92,442		8.5 %
Total Retail Sales-	37,072		34,655		7.0 %		2.3 %		72,228		69,306		4.2 %		1.5 %
Residential	12,062		10,838		11.3 %		1.0 %		24,166		22,878		5.6 %		(0.1) %
Commercial	12,246		11,500		6.5 %		2.2 %		23,233		22,243		4.5 %		2.1 %
Industrial	12,615		12,162		3.7 %		3.7 %		24,527		23,870		2.8 %		2.8 %
Other	149		155		(4.2) %		(4.4) %		302		315		(4.4) %		(4.4) %
Total Wholesale Sales	14,469		11,365		27.3 %		N/A		28,041		23,136		21.2 %		N/A
(In Thousands of Customers)
									Period Ended June
									2022		2021		Change
Regulated Utility Customers-
Total Utility Customers-									8,724		8,659		0.8 %
Total Traditional Electric									4,410		4,359		1.2 %
Southern Company Gas									4,314		4,300		0.3 %

 

Page 11
Southern Company
Financial Overview
As Reported
(In Millions of Dollars)
	Three Months Ended June						Year-To-Date June
	2022		2021		% Change		2022		2021		% Change
Southern Company –
Operating Revenues	$  7,206		$  5,198		38.6 %		$ 13,854		$ 11,108		24.7 %
Earnings Before Income Taxes	1,393		364		N/M		2,556		1,660		54.0 %
Net Income Available to Common	1,107		372		N/M		2,139		1,508		41.8 %
Alabama Power –
Operating Revenues	$  1,931		$  1,556		24.1 %		$  3,580		$  3,115		14.9 %
Earnings Before Income Taxes	508		439		15.7 %		964		910		5.9 %
Net Income Available to Common	383		331		15.7 %		730		690		5.8 %
Georgia Power –
Operating Revenues	$  3,121		$  2,225		40.3 %		$  5,328		$  4,195		27.0 %
Earnings Before Income Taxes	772		93		N/M		1,187		462		N/M
Net Income Available to Common	608		143		N/M		993		494		N/M
Mississippi Power –
Operating Revenues	$      434		$      303		43.2 %		$      769		$      610		26.1 %
Earnings Before Income Taxes	57		46		23.9 %		107		95		12.6 %
Net Income Available to Common	45		38		18.4 %		87		83		4.8 %
Southern Power –
Operating Revenues	$      899		$      490		83.5 %		$  1,438		$      930		54.6 %
Earnings Before Income Taxes	101		34		N/M		116		89		30.3 %
Net Income Available to Common	98		36		N/M		170		133		27.8 %
Southern Company Gas –
Operating Revenues	$  1,083		$      677		60.0 %		$  3,140		$  2,371		32.4 %
Earnings (Loss) Before Income Taxes	151		(94)		N/M		567		425		33.4 %
Net Income (Loss) Available to Common	115		(65)		N/M		433		333		30.0 %
N/M - Not Meaningful

 

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 second-quarter earnings for 2022?

Southern Company's second-quarter earnings for 2022 were $1.1 billion, or $1.04 per share.

How did Southern Company's operating revenues change in the second quarter of 2022?

Operating revenues increased by 38.6% to $7.2 billion in the second quarter of 2022.

What was Southern Company's earnings per share for the first half of 2022?

For the first half of 2022, Southern Company reported earnings per share of $2.01.

What factors contributed to Southern Company's revenue increase in Q2 2022?

The revenue increase was driven by higher fuel costs and increased energy usage due to warmer weather.