On August 1, 2024, Southern Co (SO, Financial) released its 8-K filing detailing its second-quarter earnings for 2024. Southern Co, one of the largest utilities in the U.S., serves 9 million customers with vertically integrated electric utilities in three states and natural gas distribution utilities in four states. The company owns 50 gigawatts of rate-regulated generating capacity, primarily for serving customers in Georgia, Alabama, and Mississippi. Its subsidiary, Southern Power, owns 13 gigawatts of natural gas generation and renewable energy across the U.S., selling electricity primarily under long-term contracts.
Performance Overview
Southern Co reported second-quarter earnings of $1.2 billion, or $1.10 per share, compared to $838 million, or 77 cents per share, in the second quarter of 2023. This represents a significant year-over-year increase in earnings. However, the reported EPS of $1.10 fell short of the analyst estimate of $1.17. For the six months ended June 30, 2024, the company 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.
Revenue and Financial Achievements
Second-quarter 2024 operating revenues were $6.5 billion, compared to $5.7 billion for the second quarter of 2023, marking a 12.4% increase. For the six months ended June 30, 2024, operating revenues were $13.1 billion, compared to $12.2 billion for the corresponding period in 2023, an increase of 7.2%. This revenue growth is crucial for Southern Co, as it underscores the company's ability to generate higher utility revenues despite increased interest expenses, depreciation, and income taxes.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 | Change |
|---|---|---|---|
| Operating Revenues | $6.5 billion | $5.7 billion | 12.4% |
| Net Income | $1.2 billion | $838 million | 43.3% |
| EPS | $1.10 | $0.77 | 42.9% |
Challenges and Key Metrics
Despite the positive revenue growth, Southern Co faces challenges such as increased interest expenses, depreciation, and income taxes. These factors partially offset the higher utility revenues. The company's ability to manage these expenses while continuing to grow its revenue base will be critical for its future performance.
Key metrics from the earnings report include:
- Net income excluding items: $1.2 billion, or $1.10 per share, compared to $868 million, or 79 cents per share, in Q2 2023.
- Operating income: $1.9 billion, up from $1.3 billion in Q2 2023.
- Depreciation and amortization: $1.2 billion, up from $1.1 billion in Q2 2023.
Commentary and Analysis
"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 Co's strong performance in the second quarter highlights its resilience and ability to generate substantial revenue growth. However, the missed EPS estimate indicates potential areas for improvement, particularly in managing operational costs and interest expenses. Investors will be keen to see how the company addresses these challenges in the coming quarters.
For more detailed financial information, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Southern Co for further details.
