The Southern Company ((SO)) has held its Q2 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 latest earnings call painted a picture of strong performance and growth, despite some challenges. The sentiment was largely positive, driven by significant growth in adjusted earnings and retail electricity sales, alongside robust economic development and an expanded capital plan. However, the company also faced hurdles such as decreased year-over-year earnings and increased operating costs. Nevertheless, the outlook remains optimistic with strong load growth projections.
Strong Adjusted Earnings
The Southern Company reported strong adjusted earnings for the second quarter of 2025, with adjusted earnings per share reaching $0.92, surpassing estimates by $0.07. This performance underscores the company’s ability to exceed market expectations and deliver solid financial results.
Increased Retail Electricity Sales
Retail electricity sales showed an upward trend, with a 1.3% increase year-to-date compared to the first half of 2024. Additionally, year-over-year retail electricity sales rose by 3% in the second quarter of 2025, highlighting the company’s growth in this segment.
Economic Development and Job Creation
The second quarter saw significant economic development activities, including nearly $2 billion in capital investment and the announcement of over 6,000 new jobs in the company’s service territories. This development reflects The Southern Company’s commitment to fostering economic growth and job creation.
Capital Plan Expansion
The company expanded its five-year base capital plan by adding $12 billion of state-regulated capital, increasing the total from $63 billion to $76 billion. This expansion demonstrates The Southern Company’s strategic focus on long-term growth and infrastructure development.
Robust Load Growth Projections
Projections for load growth remain robust, with a large load pipeline across Alabama, Georgia, and Mississippi exceeding 50 gigawatts of potential incremental load by the mid-2030s. This indicates strong future demand and growth potential in these regions.
Decreased Year-over-Year Earnings
Despite the positive results, adjusted earnings per share were $0.18 lower than in the second quarter of 2024. This decline highlights some of the challenges the company faces in maintaining consistent year-over-year growth.
Higher Operating Costs and Expenses
The company’s performance was offset by higher operating costs, interest expenses, and depreciation and amortization. These increased expenses pose a challenge to maintaining profitability.
Current Year State Tax Credit Adjustments
Earnings were negatively impacted by current year state tax credit adjustments, which affected the overall financial performance.
Forward-Looking Guidance
The Southern Company provided strong guidance during the earnings call, emphasizing its robust financial performance and strategic outlook. The company highlighted significant growth in industrial sales, particularly in the data center segment, which increased by 13% compared to the prior year. The five-year capital plan was raised to $76 billion, with potential for an additional $5 billion, reflecting strong projected customer and load growth. The company is also on track to meet a 17% FFO to debt ratio while maintaining a disciplined approach to funding and investment.
In summary, The Southern Company’s earnings call revealed a positive sentiment with strong growth in key areas such as adjusted earnings and retail electricity sales. Despite facing challenges like decreased year-over-year earnings and higher operating costs, the company remains optimistic about its future prospects, backed by robust load growth projections and strategic capital investments.