Southern Company reports second-quarter 2023 earnings
- Southern Company's second-quarter earnings decreased from 2022, but excluding items, the earnings were relatively stable.
- The milestone of Plant Vogtle Unit 3 entering commercial operation is a positive sign for Southern Company's energy production capabilities.
- None.
Excluding the items described under "Net Income – Excluding Items" in the table below, Southern Company earned
Non-GAAP Financial Measures | Three Months Ended June | Year-to-Date June | ||||
Net Income - Excluding Items (in millions) | 2023 | 2022 | 2023 | 2022 | ||
Net Income - As Reported | ||||||
Less: | ||||||
Estimated Loss on Plants Under Construction | (3) | (54) | (4) | (55) | ||
Tax Impact | 1 | 13 | 1 | 13 | ||
Acquisition and Disposition Impacts | - | 5 | - | 5 | ||
Tax Impact | - | (1) | - | (1) | ||
Loss on Extinguishment of Debt | - | - | (5) | - | ||
Tax Impact | - | - | 1 | - | ||
Estimated Loss on Qualifying Infrastructure Plant | (38) | - | (38) | - | ||
Tax Impact | 10 | - | 10 | - | ||
Net Income – Excluding Items | ||||||
Average Shares Outstanding – (in millions) | 1,092 | 1,065 | 1,092 | 1,064 | ||
Basic Earnings Per Share – Excluding Items | ||||||
NOTE: For more information regarding these non-GAAP adjustments, see the footnotes accompanying the Financial | ||||||
Adjusted earnings drivers for the second quarter 2023, as compared with the same period in 2022, were increased depreciation and amortization, milder weather at the company's regulated electric utilities, changes in rates and pricing and higher interest expense, partially offset by lower income taxes and lower non-fuel operations and maintenance costs.
Second-quarter 2023 operating revenues were
"During the first half of the year, we experienced the mildest weather on record for our electric service territories. As we focus on delivering on our financial objectives, we remain committed to providing outstanding service to our customers and the growing economies we serve," said President and CEO Christopher C. Womack.
"We are extremely pleased to share that Plant Vogtle Unit 3 entered commercial operation on Monday of this week," added Womack. "Unit 3 is now serving
"As the first new nuclear facility to be built in
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 Womack 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 http://investor.southerncompany.com. 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 provider serving 9 million customers across the Southeast and beyond through its family of companies. Providing clean, safe, reliable and affordable energy with excellent service is our mission. The company has electric operating companies in three states, natural gas distribution companies in four states, a competitive generation company, a leading distributed energy distribution company with national capabilities, a fiber optics network and telecommunications services. Through an industry-leading commitment to innovation, resilience and sustainability, we are taking action to meet customers' and communities' needs while advancing our goal of net zero greenhouse gas emissions by 2050. 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. We are transforming energy into economic, environmental and social progress for tomorrow. Our corporate culture and hiring practices have earned the company national awards and recognition from numerous organizations, including Forbes, The Military Times, DiversityInc, Black Enterprise, J.D. Power, Fortune, Human Rights Campaign and more. To learn more, visit www.southerncompany.com.
Cautionary Note Regarding Forward-Looking Statements:
Certain information contained in this release is forward-looking information based on current expectations and plans that involve risks and uncertainties. Forward-looking information includes, among other things, expectations regarding successful completion of Plant Vogtle Unit 4. Southern Company cautions that there are certain factors that can cause actual results to differ materially from the forward-looking information that has been provided. The reader is cautioned not to put undue reliance on this forward-looking information, which is not a guarantee of future performance and is subject to a number of uncertainties and other factors, many of which are outside the control of Southern Company; accordingly, there can be no assurance that such suggested results will be realized. The following factors, in addition to those discussed in Southern Company's Annual Report on Form 10-K for the year ended December 31, 2022 and subsequent securities filings, could cause actual results to differ materially from management expectations as suggested by such forward-looking information: current and future litigation or regulatory investigations, proceedings, or inquiries, including litigation and other disputes related to Plant Vogtle Units 3 and 4; the ability to control costs and avoid cost and schedule overruns during the development, construction, and operation of facilities or other projects, including Plant Vogtle Unit 4 (which includes components based on new technology that only within the last few years began initial operation in the global nuclear industry at this scale), due to current and/or future challenges which include, but are not limited to, changes in labor costs, availability, and productivity, challenges with the management of contractors or vendors, subcontractor performance, adverse weather conditions, shortages, delays, increased costs, or inconsistent quality of equipment, materials, and labor, contractor or supplier delay, the impacts of inflation, delays due to judicial or regulatory action, nonperformance under construction, operating, or other agreements, operational readiness, including specialized operator training and required site safety programs, engineering or design problems or any remediation related thereto, design and other licensing-based compliance matters, challenges with start-up activities, including major equipment failure or system integration, and/or operational performance, continued challenges related to the COVID-19 pandemic or future pandemic health events, continued public and policymaker support for projects, environmental and geological conditions, delays or increased costs to interconnect facilities to transmission grids, and increased financing costs as a result of changes in market interest rates or as a result of project delays; the ability to overcome or mitigate the current challenges, or challenges yet to be identified, at Plant Vogtle Unit 4, that could further impact the cost and schedule for the project; legal proceedings and regulatory approvals and actions related to construction projects, such as Plant Vogtle Unit 4, including Public Service Commission approvals and
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) | 2023 | 2022 | 2023 | 2022 | |||
Traditional Electric Operating Companies | $ 823 | $ 1,036 | $ 1,433 | $ 1,811 | |||
Southern Power | 85 | 98 | 187 | 170 | |||
Southern Company Gas | 85 | 115 | 393 | 433 | |||
Total | 993 | 1,249 | 2,013 | 2,414 | |||
Parent Company and Other | (155) | (142) | (313) | (275) | |||
Net Income–As Reported | $ 838 | $ 1,107 | $ 1,700 | $ 2,139 | |||
Basic Earnings Per Share1 | $ 0.77 | $ 1.04 | $ 1.56 | $ 2.01 | |||
Average Shares Outstanding (in millions) | 1,092 | 1,065 | 1,092 | 1,064 | |||
End of Period Shares Outstanding (in millions) | 1,091 | 1,063 | |||||
Non-GAAP Financial Measures | Three Months Ended June | Year-To-Date June | |||||
Net Income–Excluding Items (See Notes) | 2023 | 2022 | 2023 | 2022 | |||
Net Income–As Reported | $ 838 | $ 1,107 | $ 1,700 | $ 2,139 | |||
Less: | |||||||
Estimated Loss on Plants Under Construction2 | (3) | (54) | (4) | (55) | |||
Tax Impact | 1 | 13 | 1 | 13 | |||
Acquisition and Disposition Impacts | — | 5 | — | 5 | |||
Tax Impact | — | (1) | — | (1) | |||
Loss on Extinguishment of Debt3 | — | — | (5) | — | |||
Tax Impact | — | — | 1 | — | |||
Estimated Loss on Qualifying Infrastructure Plant4 | (38) | — | (38) | — | |||
Tax Impact | 10 | — | 10 | — | |||
Net Income–Excluding Items | $ 868 | $ 1,144 | $ 1,735 | $ 2,177 | |||
Basic Earnings Per Share–Excluding Items | $ 0.79 | $ 1.07 | $ 1.59 | $ 2.05 | |||
- See Notes on the following page. | |||||||
Southern Company
Financial Highlights
Notes
- Dilution is not material in any period presented. Diluted earnings per share was
$0.76 $1.55 $1.03 $2.00 - Earnings for the three and six months ended June 30, 2022 include a charge of
$52 million $39 million $15 million - Earnings for the six months ended June 30, 2023 include costs associated with the extinguishment of debt at Southern Company. Similar transaction costs may occur in the future at Southern Company or one of its unregulated subsidiaries; however, the amount and timing of any such costs are uncertain.
- Earnings for the three and six months ended June 30, 2023 include a charge of
$38 million $28 million Illinois , program. Further charges may occur; however, the amount and timing of any such charges are uncertain.
Southern Company | |||||||||||
Significant Factors Impacting EPS | |||||||||||
Three Months Ended June | Year-To-Date June | ||||||||||
2023 | 2022 | Change | 2023 | 2022 | Change | ||||||
Earnings Per Share– | |||||||||||
As Reported1 (See Notes) | $ (0.27) | $ (0.45) | |||||||||
Significant Factors: | |||||||||||
Traditional Electric Operating Companies | $ (0.20) | $ (0.35) | |||||||||
Southern Power | (0.01) | 0.02 | |||||||||
Southern Company Gas | (0.03) | (0.04) | |||||||||
Parent Company and Other | (0.01) | (0.04) | |||||||||
Increase in Shares | (0.02) | (0.04) | |||||||||
Total–As Reported | $ (0.27) | $ (0.45) | |||||||||
Three Months Ended June | Year-To-Date June | ||||||||||
Non-GAAP Financial Measures | 2023 | 2022 | Change | 2023 | 2022 | Change | |||||
Earnings Per Share– | |||||||||||
Excluding Items (See Notes) | $ (0.28) | $ (0.46) | |||||||||
Total–As Reported | $ (0.27) | $ (0.45) | |||||||||
Less: | |||||||||||
Estimated Loss on Plants Under Construction2 | 0.04 | 0.04 | |||||||||
Acquisition and Disposition Impacts | (0.01) | — | |||||||||
Loss on Extinguishment of Debt3 | — | — | |||||||||
Estimated Loss on Qualifying Infrastructure Plant4 | (0.02) | (0.03) | |||||||||
Total–Excluding Items | $ (0.28) | $ (0.46) | |||||||||
- See Notes on the following page. | |||||||||||
Southern Company
Significant Factors Impacting EPS
Notes
- Dilution is not material in any period presented. Diluted earnings per share was
$0.76 $1.55 $1.03 $2.00 - Earnings for the three and six months ended June 30, 2022 include a charge of
$52 million $39 million $15 million - Earnings for the six months ended June 30, 2023 include costs associated with the extinguishment of debt at Southern Company. Similar transaction costs may occur in the future at Southern Company or one of its unregulated subsidiaries; however, the amount and timing of any such costs are uncertain.
- Earnings for the three and six months ended June 30, 2023 include a charge of
$38 million $28 million Illinois , program. Further charges may occur; however, the amount and timing of any such charges are uncertain.
Southern Company | |||
EPS Earnings Analysis | |||
Description | Three Months Ended | Year-To-Date June 2023 vs. 2022 | |
Retail Sales | (2)¢ | (1)¢ | |
Retail Revenue Impacts | (8) | (1) | |
Weather | (12) | (23) | |
Wholesale & Other Operating Revenues | 2 | 6 | |
Non-Fuel O&M(*) | 5 | 7 | |
Depreciation and Amortization | (14) | (29) | |
Interest Expense and Other | (2) | (6) | |
Income Taxes | 7 | 8 | |
Total Traditional Electric Operating Companies | (24)¢ | (39)¢ | |
Southern Power | (1) | 2 | |
Southern Company Gas | — | (1) | |
Parent Company and Other | (1) | (4) | |
Increase in Shares | (2) | (4) | |
Total Change in EPS (Excluding Items) | (28)¢ | (46)¢ | |
Estimated Loss on Plants Under Construction1 | 4 | 4 | |
Acquisition and Disposition Impacts | (1) | — | |
Loss on Extinguishment of Debt2 | — | — | |
Estimated Loss on Qualifying Infrastructure Plant3 | (2) | (3) | |
Total Change in EPS (As Reported) | (27)¢ | (45)¢ | |
(*) Includes non-service cost-related benefits income. | |||
- See additional Notes on the following page. | |||
Southern Company
EPS Earnings Analysis
Notes
- Earnings for the three and six months ended June 30, 2022 include a charge of
$52 million $39 million $15 million - Earnings for the six months ended June 30, 2023 include costs associated with the extinguishment of debt at Southern Company. Similar transaction costs may occur in the future at Southern Company or one of its unregulated subsidiaries; however, the amount and timing of any such costs are uncertain.
- Earnings for the three and six months ended June 30, 2023 include a charge of
$38 million $28 million Illinois , program. Further charges may occur; however, the amount and timing of any such charges are uncertain.
Southern Company | |||||||||||
Consolidated Earnings | |||||||||||
As Reported | |||||||||||
(In Millions of Dollars) | |||||||||||
Three Months Ended June | Year-To-Date June | ||||||||||
2023 | 2022 | Change | 2023 | 2022 | Change | ||||||
Retail Electric Revenues- | |||||||||||
Fuel | $ 1,006 | $ 1,608 | $ (602) | $ 2,056 | $ 2,622 | $ (566) | |||||
Non-Fuel | 2,853 | 3,181 | (328) | 5,402 | 5,780 | (378) | |||||
Wholesale Electric Revenues | 605 | 937 | (332) | 1,203 | 1,601 | (398) | |||||
Other Electric Revenues | 209 | 192 | 17 | 399 | 370 | 29 | |||||
Natural Gas Revenues | 852 | 1,083 | (231) | 2,728 | 3,140 | (412) | |||||
Other Revenues | 223 | 205 | 18 | 440 | 341 | 99 | |||||
Total Operating Revenues | 5,748 | 7,206 | (1,458) | 12,228 | 13,854 | (1,626) | |||||
Fuel and Purchased Power | 1,190 | 2,123 | (933) | 2,482 | 3,466 | (984) | |||||
Cost of Natural Gas | 199 | 452 | (253) | 1,097 | 1,546 | (449) | |||||
Cost of Other Sales | 128 | 114 | 14 | 255 | 183 | 72 | |||||
Non-Fuel O&M | 1,489 | 1,548 | (59) | 2,929 | 3,042 | (113) | |||||
Depreciation and Amortization | 1,112 | 913 | 199 | 2,222 | 1,805 | 417 | |||||
Taxes Other Than Income Taxes | 340 | 349 | (9) | 734 | 721 | 13 | |||||
Estimated Loss on Plant Vogtle Units 3 and 4 | — | 52 | (52) | — | 52 | (52) | |||||
Total Operating Expenses | 4,458 | 5,551 | (1,093) | 9,719 | 10,815 | (1,096) | |||||
Operating Income | 1,290 | 1,655 | (365) | 2,509 | 3,039 | (530) | |||||
Allowance for Equity Funds Used During Construction | 70 | 53 | 17 | 135 | 104 | 31 | |||||
Earnings from Equity Method Investments | 29 | 34 | (5) | 78 | 80 | (2) | |||||
Interest Expense, Net of Amounts Capitalized | 610 | 488 | 122 | 1,192 | 950 | 242 | |||||
Other Income (Expense), net | 142 | 139 | 3 | 286 | 283 | 3 | |||||
Income Taxes | 98 | 304 | (206) | 194 | 477 | (283) | |||||
Net Income | 823 | 1,089 | (266) | 1,622 | 2,079 | (457) | |||||
Dividends on Preferred Stock of Subsidiaries | — | 4 | (4) | — | 7 | (7) | |||||
Net Loss Attributable to Noncontrolling Interests | (15) | (22) | 7 | (78) | (67) | (11) | |||||
NET INCOME ATTRIBUTABLE TO SOUTHERN | $ 838 | $ 1,107 | $ (269) | $ 1,700 | $ 2,139 | $ (439) | |||||
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 June | Year-To-Date June | ||||||||||||||
2023 | 2022 | Change | Weather | 2023 | 2022 | Change | Weather | ||||||||
Kilowatt-Hour Sales- | |||||||||||||||
Total Sales | 48,003 | 51,541 | (6.9) % | 94,729 | 100,269 | (5.5) % | |||||||||
Total Retail Sales- | 34,969 | 37,072 | (5.7) % | (0.7) % | 68,351 | 72,228 | (5.4) % | (0.1) % | |||||||
Residential | 10,695 | 12,062 | (11.3) % | (0.4) % | 21,326 | 24,166 | (11.8) % | 0.5 % | |||||||
Commercial | 11,826 | 12,246 | (3.4) % | 0.9 % | 22,708 | 23,233 | (2.3) % | 1.3 % | |||||||
Industrial | 12,317 | 12,615 | (2.4) % | (2.4) % | 24,040 | 24,527 | (2.0) % | (2.0) % | |||||||
Other | 131 | 149 | (11.5) % | (11.1) % | 277 | 302 | (8.2) % | (7.5) % | |||||||
Total Wholesale Sales | 13,034 | 14,469 | (9.9) % | N/A | 26,378 | 28,041 | (5.9) % | N/A | |||||||
(In Thousands of Customers) | |||||||||||||||
Period Ended June | |||||||||||||||
2023 | 2022 | Change | |||||||||||||
Regulated Utility Customers- | |||||||||||||||
Total Utility Customers- | 8,800 | 8,724 | 0.9 % | ||||||||||||
Total Traditional Electric | 4,463 | 4,410 | 1.2 % | ||||||||||||
Southern Company Gas | 4,337 | 4,314 | 0.5 % | ||||||||||||
Southern Company | |||||||||||
Financial Overview | |||||||||||
As Reported | |||||||||||
(In Millions of Dollars) | |||||||||||
Three Months Ended June | Year-To-Date June | ||||||||||
2023 | 2022 | % Change | 2023 | 2022 | % Change | ||||||
Southern Company – | |||||||||||
Operating Revenues | $ 5,748 | $ 7,206 | (20.2) % | (11.7) % | |||||||
Earnings Before Income Taxes | 921 | 1,393 | (33.9) % | 1,816 | 2,556 | (29.0) % | |||||
Net Income Available to Common | 838 | 1,107 | (24.3) % | 1,700 | 2,139 | (20.5) % | |||||
Alabama Power – | |||||||||||
Operating Revenues | $ 1,689 | $ 1,931 | (12.5) % | $ 3,336 | $ 3,580 | (6.8) % | |||||
Earnings Before Income Taxes | 337 | 508 | (33.7) % | 591 | 964 | (38.7) % | |||||
Net Income Available to Common | 312 | 383 | (18.5) % | 568 | 730 | (22.2) % | |||||
Georgia Power – | |||||||||||
Operating Revenues | $ 2,391 | $ 3,121 | (23.4) % | $ 4,567 | $ 5,328 | (14.3) % | |||||
Earnings Before Income Taxes | 563 | 772 | (27.1) % | 911 | 1,187 | (23.3) % | |||||
Net Income Available to Common | 471 | 608 | (22.5) % | 767 | 993 | (22.8) % | |||||
Mississippi Power – | |||||||||||
Operating Revenues | $ 311 | $ 434 | (28.3) % | $ 702 | $ 769 | (8.7) % | |||||
Earnings Before Income Taxes | 44 | 57 | (22.8) % | 115 | 107 | 7.5 % | |||||
Net Income Available to Common | 40 | 45 | (11.1) % | 98 | 87 | 12.6 % | |||||
Southern Power – | |||||||||||
Operating Revenues | $ 525 | $ 899 | (41.6) % | $ 1,033 | $ 1,438 | (28.2) % | |||||
Earnings Before Income Taxes | 76 | 101 | (24.8) % | 108 | 116 | (6.9) % | |||||
Net Income Available to Common | 85 | 98 | (13.3) % | 187 | 170 | 10.0 % | |||||
Southern Company Gas – | |||||||||||
Operating Revenues | $ 852 | $ 1,083 | (21.3) % | $ 2,728 | $ 3,140 | (13.1) % | |||||
Earnings Before Income Taxes | 114 | 151 | (24.5) % | 525 | 567 | (7.4) % | |||||
Net Income Available to Common | 85 | 115 | (26.1) % | 393 | 433 | (9.2) % | |||||
Notes | |||||||||||
- See Financial Highlights pages for discussion of certain significant items occurring during the periods. | |||||||||||
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SOURCE Southern Company
FAQ
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