The Southern Company ((SO)) has held its Q3 earnings call. Read on for the main highlights of the call.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
The Southern Company’s recent earnings call conveyed an optimistic sentiment, highlighting robust financial performance and growth in its customer base and energy usage. The company also showcased significant economic development activities. However, challenges such as rising costs and a negative outlook from Moody’s were acknowledged, alongside caution regarding future nuclear expansion.
Strong Adjusted Earnings
The Southern Company reported a strong performance for the third quarter of 2025, with adjusted earnings per share (EPS) reaching $1.60. This figure surpassed the previous estimate by $0.10 and was $0.17 higher than the third quarter of 2024, reflecting the company’s solid financial footing.
Customer Growth and Usage Increase
There was a notable increase in customer growth and energy usage, with weather-normal retail electricity sales up by 1.8% compared to the first three quarters of 2024. The commercial sector experienced a significant rise of 3.5%, while data centers saw a remarkable 17% increase.
Economic Development and Job Creation
The company announced plans from 22 companies to establish or expand operations, potentially creating nearly 5,000 new jobs and attracting capital investments of approximately $2.8 billion, underscoring its role in economic development.
Progress in Equity Financing
Southern Company made strides in equity financing by pricing an additional $1.8 billion through forward sales agreements. This move solidifies over $7 billion of the $9 billion equity need through 2029, supporting its long-term financial strategy.
Recognition for Trustworthiness
In a testament to its reputation, Southern Company was named to Newsweek’s World’s Most Trustworthy Companies for 2025 list, ranking as the highest energy company in the U.S.
Higher Costs
The company faced higher costs during the quarter, attributed to milder weather, increased depreciation and amortization, and rising interest costs, which partially offset its strong performance.
Moody’s Negative Outlook
Moody’s placed Southern Company on a negative outlook, which could impact the timing of future equity issuances, adding a layer of uncertainty to its financial strategy.
Uncertainties in Nuclear Expansion
Despite federal support for nuclear development, Southern Company remains cautious about committing to new nuclear projects due to associated risks, indicating a careful approach to future expansions.
Forward-Looking Guidance
The company provided strong guidance, emphasizing its robust financial health and growth prospects. It reported an adjusted EPS of $1.60 for the third quarter, with year-to-date EPS at $3.76, up from $3.56 in 2024. Retail electricity sales increased by 1.8% year-over-year. Southern Company anticipates its fourth quarter adjusted EPS to be $0.54, potentially placing full-year earnings at the top of its guidance range of $4.30 per share. The company plans to address a $9 billion equity need through 2029 to support a $76 billion capital investment plan.
In summary, The Southern Company’s earnings call highlighted a positive outlook with strong financial performance and growth in customer base and energy usage. While challenges such as higher costs and Moody’s negative outlook were noted, the company remains optimistic about its future growth prospects and financial health.