Southern Company reports second-quarter 2024 earnings

Rhea-AI Summary

Southern Company reported second-quarter 2024 earnings of $1.2 billion, or $1.10 per share, compared to $838 million, or 77 cents per share, in Q2 2023. Excluding certain items, adjusted earnings were $1.2 billion, or $1.10 per share, up from $868 million, or 79 cents per share, in Q2 2023. Operating revenues increased 12.4% to $6.5 billion. For the first half of 2024, earnings were $2.3 billion, or $2.13 per share, compared to $1.7 billion, or $1.56 per share, in the same period of 2023.

Key drivers for the improved earnings included higher utility revenues, partially offset by increased interest expense, depreciation and amortization, and income taxes. The company noted strong business fundamentals and robust economic development in its Southeastern service areas.

Positive

• Earnings per share increased from $0.77 in Q2 2023 to $1.10 in Q2 2024
• Operating revenues grew 12.4% year-over-year to $6.5 billion in Q2 2024
• Strong economic development and customer growth reported in Southeastern service areas

Negative

• Increased interest expense reported
• Higher depreciation and amortization expenses noted
• Increased income taxes mentioned as offsetting positive revenue growth

Financial Analyst

Southern Company's Q2 2024 results demonstrate robust financial performance, with notable improvements across key metrics. Earnings per share (EPS) jumped to $1.10 from $0.77 in Q2 2023, a substantial 42.9% increase. This growth is particularly impressive given the challenging economic environment many utilities face.

The company's revenue growth of 12.4% year-over-year is exceptional for a utility, typically characterized by steady but modest growth. This suggests either significant customer base expansion, rate increases, or both. The sustained customer growth mentioned by CEO Womack aligns with this revenue surge.

Importantly, the adjusted earnings, which exclude non-recurring items, show identical figures to the reported earnings. This indicates high-quality earnings without reliance on one-time gains or accounting adjustments. The consistency between reported and adjusted figures enhances the credibility of Southern Company's financial reporting.

However, investors should note the increased interest expense mentioned as a partial offset to higher revenues. In the current rising interest rate environment, this trend may continue and could pressure margins in future quarters if not managed effectively.

Overall, Southern Company's Q2 results paint a picture of a utility company executing well in a favorable economic environment, with strong customer growth and robust financial performance. The challenge will be maintaining this momentum in the face of potential headwinds such as rising interest rates and inflationary pressures.

Utility Industry Expert

Southern Company's Q2 2024 performance is noteworthy in the context of the broader utility sector. The 12.4% revenue growth significantly outpaces the industry average, which typically hovers around 2-3% annually. This exceptional growth suggests Southern Company is capitalizing on favorable regional economic conditions and potentially benefiting from regulatory decisions.

The company's focus on its Southeastern service footprint is proving strategically sound. This region has been experiencing above-average population growth and economic development, translating into a growing customer base for Southern Company. The utility sector's growth is often tied to population trends, making this geographic focus a key driver of the company's outperformance.

However, it's important to monitor the sustainability of this growth rate. Utilities often face regulatory scrutiny when profits surge, which could lead to pressure for rate adjustments or increased infrastructure investments. The mention of increased depreciation and amortization expenses suggests ongoing capital expenditures, likely aimed at grid modernization and capacity expansion to support the growing customer base.

The company's ability to maintain strong earnings growth while investing in infrastructure is commendable. It indicates effective cost management and possibly favorable regulatory treatment. However, investors should watch for any shifts in regulatory stance or economic conditions in the Southeastern region, as these could impact Southern Company's growth trajectory.

In conclusion, Southern Company's Q2 results showcase a utility company effectively leveraging regional economic strengths and managing its operations efficiently. The challenge will be maintaining this performance as the base effect of rapid growth becomes more challenging in future quarters.

ATLANTA, Aug. 1, 2024 /PRNewswire/ -- Southern Company today reported second-quarter earnings of $1.2 billion, or $1.10 per share, in 2024 compared with earnings of $838 million, or 77 cents per share, in the second quarter of 2023. For the six months ended June 30, 2024, Southern Company reported earnings of $2.3 billion, or $2.13 per share, compared with $1.7 billion, or $1.56 per share, for the same period in 2023.

Excluding the items described under "Net Income – Excluding Items" in the table below, Southern Company earned $1.2 billion, or $1.10 per share, during the second quarter of 2024, compared with $868 million, or 79 cents per share, during the second quarter of 2023. For the six months ended June 30, 2024, excluding these items, Southern Company earned $2.3 billion, or $2.13 per share, compared with $1.7 billion, or $1.59 per share, for the same period in 2023.

Non-GAAP Financial Measures	Three Months Ended June			Year-to-Date June
Net Income – Excluding Items (in millions)	2024	2023		2024	2023
Net Income – As Reported	$                 1,203	$                    838		$                 2,332	$                 1,700
Less:
Estimated Loss on Plants Under Construction	17	(3)		14	(4)
Tax Impact	(18)	1		(17)	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	$                 1,204	$                    868		$                 2,335	$                 1,735
Average Shares Outstanding – (in millions)	1,096	1,092		1,095	1,092
Basic Earnings Per Share - Excluding Items	$                   1.10	$                   0.79		$                   2.13	$                   1.59

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 of 2024, as compared with the same period in 2023, were higher utility revenues, partially offset by increased interest expense, depreciation and amortization, and income taxes.

Second-quarter 2024 operating revenues were $6.5 billion, compared with $5.7 billion for the second quarter of 2023, an increase of 12.4%. For the six months ended June 30, 2024, operating revenues were $13.1 billion, compared with $12.2 billion for the corresponding period in 2023, an increase of 7.2%.

"Southern Company businesses performed well during the second quarter of 2024," said Chairman, President and CEO Christopher C. Womack. "We are pleased with our business fundamentals, and the economies in our service territories, especially those within our Southeastern service footprint, remain strong with continuing customer growth and robust economic development."

Southern Company's second-quarter earnings slides with supplemental financial information are available at 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 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 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 southerncompany.com.

Southern Company
Financial Highlights
(In Millions Except Earnings Per Share)
	Three Months Ended June				Year-To-Date June
Net Income – As Reported	2024		2023		2024		2023
Traditional Electric Operating Companies	$      1,192		$         823		$      2,012		$      1,433
Southern Power	86		85		182		187
Southern Company Gas	108		85		517		393
Total	1,386		993		2,711		2,013
Parent Company and Other	(183)		(155)		(379)		(313)
Net Income – As Reported	$      1,203		$         838		$      2,332		$      1,700
Basic Earnings Per Share(1)	$        1.10		$        0.77		$        2.13		$        1.56
Average Shares Outstanding	1,096		1,092		1,095		1,092
Non-GAAP Financial Measures	Three Months Ended June				Year-To-Date June
Net Income – Excluding Items	2024		2023		2024		2023
Net Income – As Reported	$      1,203		$         838		$      2,332		$      1,700
Less:
Estimated Loss on Plants Under Construction(2)	17		(3)		14		(4)
Tax Impact	(18)		1		(17)		1
Loss on Extinguishment of Debt(3)	—		—		—		(5)
Tax Impact	—		—		—		1
Estimated Loss on Qualifying Infrastructure Plant(4)	—		(38)		—		(38)
Tax Impact	—		10		—		10
Net Income – Excluding Items	$      1,204		$         868		$      2,335		$      1,735
Basic Earnings Per Share – Excluding Items	$        1.10		$        0.79		$        2.13		$        1.59

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 $1.09 and $2.12 for the three and six months ended June 30, 2024, respectively, and $0.76 and $1.55 for the three and six months ended June 30, 2023, respectively.
(2)	Earnings for the three and six months ended June 30, 2024 include a pre-tax credit to income of $21 million ($16 million after tax) related to the estimated probable loss on Plant Vogtle Units 3 and 4 reflecting a revision to Georgia Power Company's total project capital cost forecast resulting from a reduction in remaining expected site demobilization costs and other contractor obligations. Additionally, earnings for the three and six months ended June 30, 2024 include a $14 million income tax charge related to the remeasuring of deferred tax assets associated with the previously recognized estimated probable loss on Plant Vogtle Units 3 and 4 due to a change in the State of Georgia corporate tax rate. Further charges and/or credits may occur; however, the amount and timing are uncertain. Earnings for the three and six months ended June 30, 2024 and 2023 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 approximately $15 million annually through 2025.
(3)	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.
(4)	Earnings for the three and six months ended June 30, 2023 include a pre-tax charge of $38 million ($28 million after tax) for an estimated loss at Southern Company Gas associated with an Illinois Commerce Commission disallowance related to its review of the Qualifying Infrastructure Plant (QIP) capital investments by Nicor Gas for calendar year 2019 under the QIP Rider, or Investing in 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
	2024		2023		Change		2024		2023		Change
Earnings Per Share –
As Reported(1)	$ 1.10		$ 0.77		$   0.33		$ 2.13		$ 1.56		$   0.57
Significant Factors:
Traditional Electric Operating Companies					$   0.34						$   0.53
Southern Power					—						(0.01)
Southern Company Gas					0.02						0.11
Parent Company and Other					(0.03)						(0.05)
Increase in Shares					—						(0.01)
Total – As Reported					$   0.33						$   0.57
	Three Months Ended June						Year-To-Date June
Non-GAAP Financial Measures	2024		2023		Change		2024		2023		Change
Earnings Per Share –
Excluding Items	$ 1.10		$ 0.79		$   0.31		$ 2.13		$ 1.59		$   0.54
Total – As Reported					$   0.33						$   0.57
Less:
Estimated Loss on Plants Under Construction(2)					—						—
Loss on Extinguishment of Debt(3)					—						—
Estimated Loss on Qualifying Infrastructure Plant(4)					0.02						0.03
Total – Excluding Items					$   0.31						$   0.54

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 $1.09 and $2.12 for the three and six months ended June 30, 2024, respectively, and $0.76 and $1.55 for the three and six months ended June 30, 2023, respectively.
(2)	Earnings for the three and six months ended June 30, 2024 include a pre-tax credit to income of $21 million ($16 million after tax) related to the estimated probable loss on Plant Vogtle Units 3 and 4 reflecting a revision to Georgia Power Company's total project capital cost forecast resulting from a reduction in remaining expected site demobilization costs and other contractor obligations. Additionally, earnings for the three and six months ended June 30, 2024 include a $14 million income tax charge related to the remeasuring of deferred tax assets associated with the previously recognized estimated probable loss on Plant Vogtle Units 3 and 4 due to a change in the State of Georgia corporate tax rate. Further charges and/or credits may occur; however, the amount and timing are uncertain. Earnings for the three and six months ended June 30, 2024 and 2023 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 approximately $15 million annually through 2025.
(3)	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.
(4)	Earnings for the three and six months ended June 30, 2023 include a pre-tax charge of $38 million ($28 million after tax) for an estimated loss at Southern Company Gas associated with an Illinois Commerce Commission disallowance related to its review of the Qualifying Infrastructure Plant (QIP) capital investments by Nicor Gas for calendar year 2019 under the QIP Rider, or Investing in 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 June 2024 vs. 2023		Year-To-Date June 2024 vs. 2023
Retail Sales	1¢		5¢
Retail Revenue Impacts	24		41
Weather	14		20
Wholesale and Other Operating Revenues	4		7
Non-Fuel Operations and Maintenance Expenses(1)	(2)		(2)
Depreciation and Amortization	(4)		(6)
Interest Expense and Other	—		(6)
Income Taxes	(3)		(6)
Total Traditional Electric Operating Companies	34¢		53¢
Southern Power	—		(1)
Southern Company Gas	—		9
Parent Company and Other	(3)		(6)
Increase in Shares	—		(1)
Total Change in EPS (Excluding Items)	31¢		54¢
Estimated Loss on Plants Under Construction(2)	—		—
Loss on Extinguishment of Debt(3)	—		—
Estimated Loss on Qualifying Infrastructure Plant(4)	2		3
Total Change in EPS (As Reported)	33¢		57¢

See Notes on the following page.

 

Southern Company EPS Earnings Analysis
Notes
(1)	Excludes gains/losses on asset sales, which are included in "Interest Expense and Other." Includes non-service cost-related benefits income.
(2)	Earnings for the three and six months ended June 30, 2024 include a pre-tax credit to income of $21 million ($16 million after tax) related to the estimated probable loss on Plant Vogtle Units 3 and 4 reflecting a revision to Georgia Power Company's total project capital cost forecast resulting from a reduction in remaining expected site demobilization costs and other contractor obligations. Additionally, earnings for the three and six months ended June 30, 2024 include a $14 million income tax charge related to the remeasuring of deferred tax assets associated with the previously recognized estimated probable loss on Plant Vogtle Units 3 and 4 due to a change in the State of Georgia corporate tax rate. Further charges and/or credits may occur; however, the amount and timing are uncertain. Earnings for the three and six months ended June 30, 2024 and 2023 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 approximately $15 million annually through 2025.
(3)	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.
(4)	Earnings for the three and six months ended June 30, 2023 include a pre-tax charge of $38 million ($28 million after tax) for an estimated loss at Southern Company Gas associated with an Illinois Commerce Commission disallowance related to its review of the Qualifying Infrastructure Plant (QIP) capital investments by Nicor Gas for calendar year 2019 under the QIP Rider, or Investing in Illinois program. Further charges may occur; however, the amount and timing of any such charges are uncertain.

 

Southern Company
Consolidated Earnings
As Reported
	Three Months Ended June						Year-To-Date June
	2024		2023		Change		2024		2023		Change
	(in millions)						(in millions)
Retail electric revenues:
Fuel	$  1,061		$  1,006		$       55		$  2,072		$  2,056		$       16
Non-fuel	3,425		2,853		572		6,355		5,402		953
Wholesale electric revenues	627		605		22		1,198		1,203		(5)
Other electric revenues	210		209		1		409		399		10
Natural gas revenues	831		852		(21)		2,538		2,728		(190)
Other revenues	309		223		86		537		440		97
Total operating revenues	6,463		5,748		715		13,109		12,228		881
Fuel and purchased power	1,254		1,190		64		2,448		2,482		(34)
Cost of natural gas	149		199		(50)		754		1,097		(343)
Cost of other sales	167		128		39		298		255		43
Non-fuel operations and maintenance	1,409		1,489		(80)		2,881		2,929		(48)
Depreciation and amortization	1,182		1,112		70		2,327		2,222		105
Taxes other than income taxes	384		340		44		780		734		46
Estimated loss on Plant Vogtle Units 3 and 4	(21)		—		(21)		(21)		—		(21)
Total operating expenses	4,524		4,458		66		9,467		9,719		(252)
Operating income	1,939		1,290		649		3,642		2,509		1,133
Allowance for equity funds used during construction	51		70		(19)		109		135		(26)
Earnings from equity method investments	31		29		2		77		78		(1)
Interest expense, net of amounts capitalized	694		610		84		1,358		1,192		166
Other income (expense), net	151		142		9		302		286		16
Income taxes	290		98		192		513		194		319
Net income	1,188		823		365		2,259		1,622		637
Net loss attributable to noncontrolling interests	(15)		(15)		—		(73)		(78)		5
Net income attributable to Southern Company	$  1,203		$     838		$     365		$  2,332		$  1,700		$     632

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

 

Southern Company
Kilowatt-Hour Sales and Customers
	Three Months Ended June								Year-To-Date June
	2024		2023		% Change		Weather Adjusted % Change		2024		2023		% Change		Weather Adjusted % Change
	(in millions)								(in millions)
Kilowatt-Hour Sales
Total Sales	49,897		48,003		3.9 %				96,426		94,729		1.8 %
Total Retail Sales	37,007		34,969		5.8 %		0.6 %		72,261		68,351		5.7 %		1.1 %
Residential	11,889		10,695		11.2 %		(1.0) %		23,765		21,326		11.4 %		0.1 %
Commercial	12,666		11,826		7.1 %		2.8 %		24,140		22,708		6.3 %		3.3 %
Industrial	12,318		12,317		— %		— %		24,086		24,040		0.2 %		0.2 %
Other	134		131		2.1 %		1.9 %		270		277		(2.4) %		(3.0) %
Total Wholesale Sales	12,890		13,034		(1.1) %		N/A		24,165		26,378		(8.4) %		N/A
									Period Ended June
									2024		2023		% Change
									(in thousands)
Regulated Utility Customers
Total Regulated Utility Customers									8,873		8,800		0.8 %
Traditional Electric Operating Companies									4,518		4,463		1.2 %
Southern Company Gas									4,355		4,337		0.4 %

 

Southern Company
Financial Overview
As Reported
	Three Months Ended June						Year-To-Date June
	2024		2023		% Change		2024		2023		% Change
	(in millions)						(in millions)
Southern Company –
Operating Revenues	$  6,463		$  5,748		12.4 %		$  13,109		$  12,228		7.2 %
Earnings Before Income Taxes	1,478		921		60.5 %		2,772		1,816		52.6 %
Net Income Available to Common	1,203		838		43.6 %		2,332		1,700		37.2 %
Alabama Power –
Operating Revenues	$  1,873		$  1,689		10.9 %		$  3,664		$  3,336		9.8 %
Earnings Before Income Taxes	471		337		39.8 %		889		591		50.4 %
Net Income Available to Common	369		312		18.3 %		702		568		23.6 %
Georgia Power –
Operating Revenues	$  2,875		$  2,391		20.2 %		$  5,273		$  4,567		15.5 %
Earnings Before Income Taxes	954		563		69.4 %		1,470		911		61.4 %
Net Income Available to Common	762		471		61.8 %		1,199		767		56.3 %
Mississippi Power –
Operating Revenues	$     364		$     311		17.0 %		$     706		$     702		0.6 %
Earnings Before Income Taxes	76		44		72.7 %		136		115		18.3 %
Net Income Available to Common	61		40		52.5 %		111		98		13.3 %
Southern Power –
Operating Revenues	$     524		$     525		(0.2) %		$     997		$  1,033		(3.5) %
Earnings Before Income Taxes	84		76		10.5 %		108		108		— %
Net Income Available to Common	86		85		1.2 %		182		187		(2.7) %
Southern Company Gas –
Operating Revenues	$     831		$     852		(2.5) %		$  2,538		$  2,728		(7.0) %
Earnings Before Income Taxes	144		114		26.3 %		691		525		31.6 %
Net Income Available to Common	108		85		27.1 %		517		393		31.6 %

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 (SO) earnings per share in Q2 2024?

Southern Company (SO) reported earnings of $1.10 per share in the second quarter of 2024.

How did Southern Company's (SO) Q2 2024 revenue compare to Q2 2023?

Southern Company's (SO) operating revenues increased 12.4% to $6.5 billion in Q2 2024 compared to $5.7 billion in Q2 2023.

What factors drove Southern Company's (SO) earnings growth in Q2 2024?

Southern Company's (SO) earnings growth in Q2 2024 was primarily driven by higher utility revenues, partially offset by increased interest expense, depreciation and amortization, and income taxes.

How did Southern Company's (SO) performance in the first half of 2024 compare to 2023?

For the first half of 2024, Southern Company (SO) reported earnings of $2.3 billion, or $2.13 per share, compared to $1.7 billion, or $1.56 per share, for the same period in 2023.