The Southern Company ((SO)) has held its Q1 earnings call. Read on for the main highlights of the call.
The Southern Company’s recent earnings call conveyed a generally positive sentiment, highlighting record-breaking earnings per share (EPS) growth and robust commercial and industrial sales. The company also emphasized significant economic development activities. However, there were some concerns regarding the impact of weather on sales and potential cost increases due to tariffs.
Record-Breaking EPS Growth
The Southern Company reported an adjusted EPS of $1.23 for the first quarter of 2025, surpassing both the previous year’s performance and the company’s own estimates. This achievement marks a $0.20 increase from Q1 2024 and exceeded the company’s projection by $0.03.
Strong Commercial and Industrial Sales
The earnings call highlighted significant growth in commercial and industrial sales, with data center sales increasing by 11% and transportation sector sales rising by 4% compared to Q1 2024. This growth underscores the company’s strong market presence and demand in these sectors.
Large Load Pipeline Growth
The Southern Company discussed its large load pipeline, which totals more than 50 gigawatts of potential incremental load by the mid-2030s. The company has already secured commitments for 10 gigawatts, reflecting its strategic focus on long-term growth.
Dividend Increase
In a move to reward shareholders, the Board of Directors approved an $0.08 per share increase in annual dividends. This marks the 24th consecutive year of dividend increases, showcasing the company’s commitment to delivering value to its investors.
Robust Economic Development Activity
The company announced over $11 billion in capital investment and the creation of more than 4,000 new jobs within its electric service territories during Q1 2025. This reflects The Southern Company’s role in driving economic growth and development in its operational areas.
Weather Impact on Sales
Despite the positive developments, the company noted a 0.3% decrease in weather-normal retail electricity sales compared to Q1 2024. This decline was primarily due to reduced usage in the residential customer class, highlighting the impact of weather variations on sales.
Potential Cost Increases Due to Tariffs
The Southern Company addressed concerns about potential cost increases due to tariffs, estimating a range of 1% to 3%. The company is committed to mitigating these impacts through various strategic measures.
Forward-Looking Guidance
Looking ahead, The Southern Company provided guidance for the second quarter, anticipating an adjusted EPS of $0.85. Despite challenges such as higher operating costs and depreciation, the company remains optimistic about its financial outlook, supported by a strong credit rating and disciplined execution strategy. The company is also focused on achieving a potential 50 gigawatts of incremental load by the mid-2030s.
In conclusion, The Southern Company’s earnings call reflected a positive outlook, driven by record EPS growth and strong sales in key sectors. While challenges such as weather impacts and tariff-related cost increases were noted, the company’s strategic initiatives and economic development activities position it well for future growth.