Southern Company reports third-quarter 2022 earnings

Rhea-AI Summary

Southern Company reported third-quarter 2022 earnings of $1.5 billion, or $1.36 per share, surpassing $1.1 billion ($1.04 per share) from 2021. For the first nine months, earnings reached $3.6 billion ($3.38 per share), up from $2.6 billion ($2.46 per share) year-over-year. Operating revenues surged 34.3% to $8.4 billion in Q3, attributed to increased usage and pricing. Key advancements include the successful initial fuel load at Plant Vogtle Unit 3, enhancing future operational capabilities.

Positive

• Third-quarter earnings increased to $1.5 billion, up from $1.1 billion in 2021.
• Operating revenues rose 34.3% to $8.4 billion in Q3 2022.
• Successful initial fuel load at Plant Vogtle Unit 3, a significant operational milestone.

Negative

• Higher non-fuel operations and maintenance costs impacting profitability.
• Increased interest expense affecting overall expenses.

ATLANTA, Oct. 27, 2022 /PRNewswire/ -- Southern Company today reported third-quarter earnings of $1.5 billion, or $1.36 per share, in 2022 compared with $1.1 billion, or $1.04 per share, in 2021. For the nine months ended September 30, 2022, Southern Company reported earnings of $3.6 billion, or $3.38 per share, compared with $2.6 billion, or $2.46 per share, for the same period in 2021.

Excluding the items described under "Net Income – Excluding Items" in the table below, Southern Company earned $1.4 billion, or $1.31 per share, during the third quarter of 2022, compared with $1.3 billion, or $1.23 per share, during the third quarter 2021. For the nine months ended September 30, 2022, excluding these items, Southern Company earned $3.6 billion, or $3.35 per share, compared with $3.2 billion, or $3.05 per share, for the same period in 2021.

 

Non-GAAP Financial Measures		Three Months Ended September			Year-to-Date September
Net Income - Excluding Items (in millions)		2022	2021		2022	2021
Net Income - As Reported		$1,472	$1,101		$3,611	$2,608
Less:
Estimated Loss on Plants Under Construction		62	(271)		7	(779)
Tax Impact		(16)	69		(2)	198
Acquisition and Disposition Impacts		14	119		19	120
Tax Impact		-	(112)		(2)	(112)
Wholesale Gas Services		-	-		-	18
Tax Impact		-	1		-	(3)
Asset Impairments		-	(2)		-	(91)
Tax Impact		-	(7)		-	19
Net Income – Excluding Items		$1,412	$1,304		$3,589	$3,238
Average Shares Outstanding – (in millions)		1,082	1,061		1,070	1,060
Basic Earnings Per Share – Excluding Items		$1.31	$1.23		$3.35	$3.05
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 third quarter 2022, as compared with the same period in 2021, were higher revenues associated with increased usage, rates and pricing at the company's regulated utilities, partially offset by higher non-fuel operations and maintenance costs, reflecting a rising cost environment and the company's long-term commitment to reliability and resilience, along with higher interest expense.

Third-quarter 2022 operating revenues were $8.4 billion, compared with $6.2 billion for the third quarter of 2021, an increase of 34.3 percent. For the nine months ended September 30, 2022, operating revenues were $22.2 billion, compared with $17.3 billion for the corresponding period in 2021, an increase of 28.2 percent. These increases were primarily due to higher fuel costs.

"Our premier, state-regulated electric and gas utilities continued to perform well during the third quarter," commented Chairman, President and CEO, Thomas A. Fanning. "The economies within our service territories remain strong, and customer growth outpaced our expectations."

Added Fanning, "At Plant Vogtle Unit 3, we successfully completed initial fuel load with the safe transfer of all 157 fuel assemblies from the spent fuel pool to the reactor core. This historic milestone marks the completion of another critical step toward start-up and commercial operation of Unit 3."

Southern Company's third-quarter earnings slides with supplemental financial information, including earnings guidance, 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 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 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 September				Year-To-Date September
Net Income–As Reported (See Notes)	2022		2021		2022		2021
Traditional Electric Operating Companies	$          1,445		$          1,085		$          3,256		$          2,352
Southern Power	95		78		265		211
Southern Company Gas	83		56		516		389
Total	1,623		1,219		4,037		2,952
Parent Company and Other	(151)		(118)		(426)		(344)
Net Income–As Reported	$          1,472		$          1,101		$          3,611		$          2,608
Basic Earnings Per Share1	$             1.36		$             1.04		$             3.38		$             2.46
Average Shares Outstanding (in millions)	1,082		1,061		1,070		1,060
End of Period Shares Outstanding (in millions)					1,089		1,060
Non-GAAP Financial Measures	Three Months Ended September				Year-To-Date September
Net Income–Excluding Items (See Notes)	2022		2021		2022		2021
Net Income–As Reported	$          1,472		$          1,101		$          3,611		$          2,608
Less:
Estimated Loss on Plants Under Construction2	62		(271)		7		(779)
Tax Impact	(16)		69		(2)		198
Acquisition and Disposition Impacts3	14		119		19		120
Tax Impact	—		(112)		(2)		(112)
Wholesale Gas Services4	—		—		—		18
Tax Impact	—		1		—		(3)
Asset Impairments5	—		(2)		—		(91)
Tax Impact	—		(7)		—		19
Net Income–Excluding Items	$          1,412		$          1,304		$          3,589		$          3,238
Basic Earnings Per Share–Excluding Items	$             1.31		$             1.23		$             3.35		$             3.05
- 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 $1.35 and $3.36 for the three and nine months ended September 30, 2022 and was $1.03 and $2.44 for the three and nine months ended September 30, 2021, respectively.
(2)	Earnings for the three and nine months ended September 30, 2022 include a net credit of $70 million pre tax ($52 million after tax) and $18 million pre tax ($13 million after tax), respectively, earnings for the three months ended September 30, 2021 include a charge of $264 million pre tax ($197 million after tax), and earnings for the nine months ended September 30, 2021 include charges totaling $772 million pre tax ($576 million after tax) for estimated probable losses on Georgia Power Company's construction of Plant Vogtle Units 3 and 4.  Further charges and credits may occur; however, the amount and timing are uncertain.  Earnings for the three and nine months ended September 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 nine months ended September 30, 2022 include a $14 million pre-tax ($11 million after-tax) gain as a result of the early termination of the transition services agreement related to the 2019 sale of Gulf Power.  Earnings for the three and nine months ended September 30, 2021 include a preliminary $121 million pre-tax ($93 million after-tax) gain on the sale of Sequent, as well as $85 million in additional tax expense resulting from the sale.  Further impacts may result from future acquisition and disposition activities; however, the amount and timing of any such impacts are uncertain.
(4)	Earnings for the three and nine months ended September 30, 2021 include results of the Wholesale Gas Services business. 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.  Amounts subsequent to the July 1, 2021 sale of Sequent represent final income adjustments.
(5)	Earnings for the three and nine months ended September 30, 2021 include pre-tax impairment charges of $2 million ($9 million after tax) and $84 million ($67 million after tax), respectively, related to Southern Company Gas' investment in the PennEast Pipeline project. Earnings for the nine months ended September 30, 2021 also include a pre-tax impairment charge of $7 million ($6 million after tax) related to a leveraged lease investment. Southern Company Gas expects to record a pre-tax impairment charge totaling approximately $125 million ($95 million after tax) in the fourth quarter 2022 related to the pending sale of two natural gas storage facilities.  Additional 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 September						Year-To-Date September
	2022		2021		Change		2022		2021		Change
Earnings Per Share–
As Reported1 (See Notes)	$   1.36		$   1.04		$    0.32		$   3.38		$   2.46		$    0.92
Significant Factors:
Traditional Electric Operating Companies					$    0.34						$    0.85
Southern Power					0.02						0.05
Southern Company Gas					0.03						0.12
Parent Company and Other					(0.04)						(0.07)
Increase in Shares					(0.03)						(0.03)
Total–As Reported					$    0.32						$    0.92
	Three Months Ended September						Year-To-Date September
Non-GAAP Financial Measures	2022		2021		Change		2022		2021		Change
Earnings Per Share–
Excluding Items (See Notes)	$   1.31		$   1.23		$    0.08		$   3.35		$   3.05		$    0.30
Total–As Reported					$    0.32						$    0.92
Less:
Estimated Loss on Plants Under Construction2					0.23						0.56
Acquisition and Disposition Impacts3					—						0.01
Wholesale Gas Services4					—						(0.02)
Asset Impairments5					0.01						0.07
Total–Excluding Items					$    0.08						$    0.30
- 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 $1.35 and $3.36 for the three and nine months ended September 30, 2022 and was $1.03 and $2.44 for the three and nine months ended September 30, 2021, respectively.
(2)	Earnings for the three and nine months ended September 30, 2022 include a net credit of $70 million pre tax ($52 million after tax) and $18 million pre tax ($13 million after tax), respectively, earnings for the three months ended September 30, 2021 include a charge of $264 million pre tax ($197 million after tax), and earnings for the nine months ended September 30, 2021 include charges totaling $772 million pre tax ($576 million after tax) for estimated probable losses on Georgia Power Company's construction of Plant Vogtle Units 3 and 4.  Further charges and credits may occur; however, the amount and timing are uncertain.  Earnings for the three and nine months ended September 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 nine months ended September 30, 2022 include a $14 million pre-tax ($11 million after-tax) gain as a result of the early termination of the transition services agreement related to the 2019 sale of Gulf Power.  Earnings for the three and nine months ended September 30, 2021 include a preliminary $121 million pre-tax ($93 million after-tax) gain on the sale of Sequent, as well as $85 million in additional tax expense resulting from the sale.  Further impacts may result from future acquisition and disposition activities; however, the amount and timing of any such impacts are uncertain.
(4)	Earnings for the three and nine months ended September 30, 2021 include results of the Wholesale Gas Services business. 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.  Amounts subsequent to the July 1, 2021 sale of Sequent represent final income adjustments.
(5)	Earnings for the three and nine months ended September 30, 2021 include pre-tax impairment charges of $2 million ($9 million after tax) and $84 million ($67 million after tax), respectively, related to Southern Company Gas' investment in the PennEast Pipeline project. Earnings for the nine months ended September 30, 2021 also include a pre-tax impairment charge of $7 million ($6 million after tax) related to a leveraged lease investment. Southern Company Gas expects to record a pre-tax impairment charge totaling approximately $125 million ($95 million after tax) in the fourth quarter 2022 related to the pending sale of two natural gas storage facilities.  Additional 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 September  2022 vs. 2021		Year-To-Date September 2022 vs. 2021
Retail Sales	6¢		13¢
Retail Revenue Impacts	11		32
Weather	2		13
Wholesale & Other Operating Revenues	2		4
Non-Fuel O&M(*)	(5)		(19)
Depreciation and Amortization, Interest Expense, Other	(4)		(7)
Income Taxes	(1)		(6)
Total Traditional Electric Operating Companies	11¢		30¢
Southern Power	2		5
Southern Company Gas	2		7
Parent and Other	(4)		(9)
Increase in Shares	(3)		(3)
Total Change in EPS (Excluding Items)	8¢		30¢
Estimated Loss on Plants Under Construction1	23		56
Acquisition and Disposition Impacts2	—		1
Wholesale Gas Services3	—		(2)
Asset Impairments4	1		7
Total Change in EPS (As Reported)	32¢		92¢
(*) 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 nine months ended September 30, 2022 include a net credit of $70 million pre tax ($52 million after tax) and $18 million pre tax ($13 million after tax), respectively, earnings for the three months ended September 30, 2021 include a charge of $264 million pre tax ($197 million after tax), and earnings for the nine months ended September 30, 2021 include charges totaling $772 million pre tax ($576 million after tax) for estimated probable losses on Georgia Power Company's construction of Plant Vogtle Units 3 and 4. Further charges and credits may occur; however, the amount and timing are uncertain.  Earnings for the three and nine months ended September 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 nine months ended September 30, 2022 include a $14 million pre-tax ($11 million after-tax) gain as a result of the early termination of the transition services agreement related to the 2019 sale of Gulf Power.  Earnings for the three and nine months ended September 30, 2021 include a preliminary $121 million pre-tax ($93 million after-tax) gain on the sale of Sequent, as well as $85 million in additional tax expense resulting from the sale.  Further impacts may result from future acquisition and disposition activities; however, the amount and timing of any such impacts are uncertain.
(3)	Earnings for the three and nine months ended September 30, 2021 include results of the Wholesale Gas Services business. 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.  Amounts subsequent to the July 1, 2021 sale of Sequent represent final income adjustments.
(4)	Earnings for the three and nine months ended September 30, 2021 include pre-tax impairment charges of $2 million ($9 million after tax) and $84 million ($67 million after tax), respectively, related to Southern Company Gas' investment in the PennEast Pipeline project. Earnings for the nine months ended September 30, 2021 also include a pre-tax impairment charge of $7 million ($6 million after tax) related to a leveraged lease investment. Southern Company Gas expects to record a pre-tax impairment charge totaling approximately $125 million ($95 million after tax) in the fourth quarter 2022 related to the pending sale of two natural gas storage facilities.  Additional 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 September						Year-To-Date September
	2022		2021		Change		2022		2021		Change
Retail Electric Revenues-
Fuel	$  2,320		$  1,186		$  1,134		$  4,942		$  2,899		$  2,043
Non-Fuel	3,641		3,365		276		9,421		8,593		828
Wholesale Electric Revenues	1,197		731		466		2,798		1,822		976
Other Electric Revenues	185		179		6		554		525		29
Natural Gas Revenues	857		623		234		3,998		2,994		1,004
Other Revenues	178		154		24		519		513		6
Total Operating Revenues	8,378		6,238		2,140		22,232		17,346		4,886
Fuel and Purchased Power	3,068		1,522		1,546		6,534		3,642		2,892
Cost of Natural Gas	294		129		165		1,840		943		897
Cost of Other Sales	92		71		21		275		255		20
Non-Fuel O&M	1,547		1,446		101		4,621		4,257		364
Depreciation and Amortization	922		896		26		2,728		2,658		70
Taxes Other Than Income Taxes	352		312		40		1,073		969		104
Estimated Loss on Plant Vogtle Units 3 and 4	(70)		264		(334)		(18)		772		(790)
Gain on Dispositions, net	(20)		(125)		105		(53)		(179)		126
Total Operating Expenses	6,185		4,515		1,670		17,000		13,317		3,683
Operating Income	2,193		1,723		470		5,232		4,029		1,203
Allowance for Equity Funds Used During Construction	59		49		10		163		140		23
Earnings from Equity Method Investments	28		30		(2)		109		35		74
Interest Expense, Net of Amounts Capitalized	511		451		60		1,461		1,352		109
Other Income (Expense), net	132		131		1		414		290		124
Income Taxes	414		372		42		891		550		341
Net Income	1,487		1,110		377		3,566		2,592		974
Dividends on Preferred Stock of Subsidiaries	3		4		(1)		10		11		(1)
Net Income (Loss) Attributable to Noncontrolling Interests	12		5		7		(55)		(27)		(28)
NET INCOME ATTRIBUTABLE TO SOUTHERN COMPANY	$  1,472		$  1,101		$      371		$  3,611		$  2,608		$  1,003
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 September								Year-To-Date September
	2022		2021		Change		Weather Adjusted Change		2022		2021		Change		Weather Adjusted Change
Kilowatt-Hour Sales-
Total Sales	56,606		54,134		4.6 %				156,874		146,576		7.0 %
Total Retail Sales-	41,490		40,441		2.6 %		1.8 %		113,716		109,747		3.6 %		1.6 %
Residential	14,467		14,063		2.9 %		1.3 %		38,632		36,941		4.6 %		0.4 %
Commercial	13,827		13,458		2.7 %		2.0 %		37,060		35,701		3.8 %		2.0 %
Industrial	13,048		12,762		2.2 %		2.2 %		37,575		36,632		2.6 %		2.6 %
Other	148		158		(6.2) %		(6.3) %		449		473		(5.0) %		(5.0) %
Total Wholesale Sales	15,116		13,693		10.4 %		N/A		43,158		36,829		17.2 %		N/A
(In Thousands of Customers)
									Period Ended September
									2022		2021		Change
Regulated Utility Customers-
Total Utility Customers-									8,722		8,656		0.8 %
Total Traditional Electric									4,422		4,373		1.1 %
Southern Company Gas									4,300		4,283		0.4 %

 

Page 11
Southern Company
Financial Overview
As Reported
(In Millions of Dollars)
	Three Months Ended September						Year-To-Date September
	2022		2021		% Change		2022		2021		% Change
Southern Company –
Operating Revenues	$  8,378		$  6,238		34.3 %		$ 22,232		$ 17,346		28.2 %
Earnings Before Income Taxes	1,901		1,482		28.3 %		4,457		3,142		41.9 %
Net Income Available to Common	1,472		1,101		33.7 %		3,611		2,608		38.5 %
Alabama Power –
Operating Revenues	$  2,444		$  1,904		28.4 %		$  6,023		$  5,019		20.0 %
Earnings Before Income Taxes	694		655		6.0 %		1,660		1,566		6.0 %
Net Income Available to Common	525		499		5.2 %		1,256		1,189		5.6 %
Georgia Power –
Operating Revenues	$  3,889		$  2,856		36.2 %		$  9,218		$  7,050		30.8 %
Earnings Before Income Taxes	1,084		649		67.0 %		2,272		1,111		104.5 %
Net Income Available to Common	858		536		60.1 %		1,851		1,030		79.7 %
Mississippi Power –
Operating Revenues	$      510		$      378		34.9 %		$  1,279		$      988		29.5 %
Earnings Before Income Taxes	79		60		31.7 %		188		155		21.3 %
Net Income Available to Common	62		50		24.0 %		150		133		12.8 %
Southern Power –
Operating Revenues	$  1,180		$      679		73.8 %		$  2,618		$  1,610		62.6 %
Earnings Before Income Taxes	143		92		55.4 %		259		181		43.1 %
Net Income Available to Common	95		78		21.8 %		265		211		25.6 %
Southern Company Gas –
Operating Revenues	$      857		$      623		37.6 %		$  3,998		$  2,994		33.5 %
Earnings Before Income Taxes	110		189		(41.8) %		677		613		10.4 %
Net Income Available to Common	83		56		48.2 %		516		389		32.6 %
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 Q3 2022 earnings results?

Southern Company reported Q3 2022 earnings of $1.5 billion, or $1.36 per share.

How much did Southern Company's operating revenues increase in Q3 2022?

Operating revenues increased by 34.3%, reaching $8.4 billion in Q3 2022.

What were the nine-month earnings for Southern Company in 2022?

For the nine months ended September 30, 2022, Southern Company reported earnings of $3.6 billion, or $3.38 per share.

What key operational milestone did Southern Company achieve at Plant Vogtle?

Southern Company completed the initial fuel load at Plant Vogtle Unit 3, marking a critical step toward commercial operation.