Southern Company reports first-quarter 2023 earnings

 Southern Company today reported first-quarter earnings of $862 million, or 79 cents per share, in 2023 compared with earnings of $1.03 billion, or 97 cents per share, in the first quarter of 2022.

Southern Company (PRNewsFoto/Southern Company) (PRNewsfoto/Southern Company)

Excluding the items described under “Net Income – Excluding Items” in the table below, Southern Company earned $867 million, or 79 cents per share, during the first quarter of 2023, compared with $1.03 billion, or 97 cents per share, during the first quarter of 2022.

Non-GAAP Financial MeasuresThree Months Ended March
Net Income – Excluding Items (in millions)20232022
Net Income – As Reported$862$1,032
Less:
   Estimated Loss on Plants Under Construction(2)(1)
  Tax Impact1
   Loss on Extinguishment of Debt(5)
       Tax Impact1
Net Income – Excluding Items$867$1,033
       Average Shares Outstanding – (in millions)                     1,0911,063
Basic Earnings Per Share – Excluding Items$0.79$0.97

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 first quarter 2023, as compared with 2022, were increased depreciation and amortization, milder weather and higher interest expense, partially offset by higher revenues associated with rates and pricing at the company’s regulated utilities.

First-quarter 2023 operating revenues were $6.5 billion, compared with $6.6 billion for the first quarter of 2022, a decrease of 2.5 percent.

“Southern Company delivered a solid start to 2023 despite the mildest weather on record for a first quarter in the Southeastern United States,” said President Christopher C. Womack. Added Womack, “We are encouraged by continued strong residential customer growth in both the electric and gas sectors, as well as healthy economies and a robust economic development pipeline in our service footprint.”

Southern Company’s first-quarter earnings slides with supplemental financial information are available at http://investor.southerncompany.com.

Southern Company’s financial analyst call will begin at 1 p.m. Eastern Time today, during which Womack 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 provider serving 9 million customers across the Southeast and beyond through its family of companies. Providing clean, safe, reliable and affordable energy with excellent service is our mission. The company has electric operating companies in three states, natural gas distribution companies in four states, a competitive generation company, a leading distributed energy distribution company with national capabilities, a fiber optics network and telecommunications services. Through an industry-leading commitment to innovation, resilience and sustainability, we are taking action to meet customers’ and communities’ needs while advancing our goal of net zero greenhouse gas emissions by 2050. Our uncompromising values ensure we put the needs of those we serve at the center of everything we do and are the key to our sustained success. We are transforming energy into economic, environmental and social progress for tomorrow. Our corporate culture and hiring practices have earned the company national awards and recognition from numerous organizations, including Forbes, The Military Times, DiversityInc, Black Enterprise, J.D. Power, Fortune, Human Rights Campaign and more. To learn more, visit www.southerncompany.com.

Southern Company
Financial Highlights
(In Millions of Dollars Except Earnings Per Share)
Three Months Ended March
Net Income–As Reported (See Notes)20232022
  Traditional Electric Operating Companies$                     610$                     774
  Southern Power10272
Southern Company Gas309319
  Total1,0211,165
  Parent Company and Other(159)(133)
  Net Income–As Reported$                     862$                 1,032
  Basic Earnings Per Share1$                    0.79$                    0.97
  Average Shares Outstanding (in millions)1,0911,063
  End of Period Shares Outstanding (in millions)1,0901,063
Non-GAAP Financial MeasuresThree Months Ended March
Net Income–Excluding Items (See Notes)20232022
  Net Income–As Reported$                     862$                 1,032
Less:
Estimated Loss on Plants Under Construction2(2)(1)
Tax Impact1
Loss on Extinguishment of Debt3(5)
Tax Impact1
  Net Income–Excluding Items$                     867$                 1,033
  Basic Earnings Per Share–Excluding Items$                    0.79$                    0.97
– See Notes on the following page.
Southern Company
Financial Highlights
Notes
(1)Dilution is not material in any period presented. Diluted earnings per share was $0.79 and $0.97 for the three months ended March 31, 2023 and 2022, respectively.
(2)Earnings for the three months ended March 31, 2023 and 2022 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 approximately $15 million annually through 2025. Additionally, further charges and credits related to estimated probable losses on Georgia Power Company’s construction of Plant Vogtle Units 3 and 4 may occur; however, the amount and timing are uncertain. 
(3)Earnings for the three months ended March 31, 2023 include costs associated with the extinguishment of debt at Southern Company.  Similar transaction costs may occur in the future at Southern Company or one of its unregulated subsidiaries; however, the amount and timing of any such costs are uncertain.
Southern Company
Significant Factors Impacting EPS
Three Months Ended March
20232022Change
Earnings Per Share–
As Reported(See Notes)$          0.79$          0.97$           (0.18)
  Significant Factors:
  Traditional Electric Operating Companies$           (0.16)
Southern Power0.03
Southern Company Gas(0.01)
Parent Company and Other(0.02)
Increase in Shares(0.02)
  Total–As Reported$           (0.18)
Three Months Ended March
Non-GAAP Financial Measures20232022Change
Earnings Per Share–
Excluding Items (See Notes)$          0.79$          0.97$           (0.18)
  Total–As Reported$           (0.18)
Less:
Estimated Loss on Plants Under Construction2
Loss on Extinguishment of Debt3
  Total–Excluding Items$           (0.18)
– See Notes on the following page.
Southern Company
Significant Factors Impacting EPS
Notes
(1)Dilution is not material in any period presented. Diluted earnings per share was $0.79 and $0.97 for the three months ended March 31, 2023 and 2022, respectively.
(2)Earnings for the three months ended March 31, 2023 and 2022 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 approximately $15 million annually through 2025. Additionally, further charges and credits related to estimated probable losses on Georgia Power Company’s construction of Plant Vogtle Units 3 and 4 may occur; however, the amount and timing are uncertain. 
(3)Earnings for the three months ended March 31, 2023 include costs associated with the extinguishment of debt at Southern Company.  Similar transaction costs may occur in the future at Southern Company or one of its unregulated subsidiaries; however, the amount and timing of any such costs are uncertain.
Southern Company
EPS Earnings Analysis
Three Months Ended March 2023 vs. March 2022
DescriptionCents
Retail Sales
Retail Revenue Impacts7
Weather(11)
Wholesale & Other Operating Revenues3
Non-Fuel O&M(*)2
Depreciation and Amortization(14)
Interest Expense and Other(5)
Income Taxes1
Total Traditional Electric Operating Companies(16)¢
Southern Power3
Southern Company Gas(1)
Parent Company and Other(2)
Increase in Shares(2)
Total Change in EPS (Excluding Items)(18)¢
Estimated Loss on Plants Under Construction1
Loss on Extinguishment of Debt2
Total Change in EPS (As Reported)(18)¢
(*) Includes non-service cost-related benefits income.
– See additional Notes on the following page.
Southern Company
EPS Earnings Analysis
Notes
(1)Earnings for the three months ended March 31, 2023 and 2022 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 approximately $15 million annually through 2025. Additionally, further charges and credits related to estimated probable losses on Georgia Power Company’s construction of Plant Vogtle Units 3 and 4 may occur; however, the amount and timing are uncertain. 
(2)Earnings for the three months ended March 31, 2023 include costs associated with the extinguishment of debt at Southern Company.  Similar transaction costs may occur in the future at Southern Company or one of its unregulated subsidiaries; however, the amount and timing of any such costs are uncertain.
Southern Company
Consolidated Earnings
As Reported
(In Millions of Dollars)
Three Months Ended March
20232022Change
Retail Electric Revenues-
Fuel$       1,050$       1,014$              36
Non-Fuel2,5492,599(50)
Wholesale Electric Revenues599664(65)
Other Electric Revenues19017713
Natural Gas Revenues1,8752,058(183)
Other Revenues21713681
Total Operating Revenues6,4806,648(168)
Fuel and Purchased Power1,2921,343(51)
Cost of Natural Gas8981,095(197)
Cost of Other Sales1276958
Non-Fuel O&M1,4821,516(34)
Depreciation and Amortization1,111892219
Taxes Other Than Income Taxes39437222
Gain on Dispositions, net(42)(23)(19)
Total Operating Expenses5,2625,264(2)
Operating Income1,2181,384(166)
Allowance for Equity Funds Used During Construction655114
Earnings from Equity Method Investments48462
Interest Expense, Net of Amounts Capitalized582462120
Other Income (Expense), net1471452
Income Taxes97173(76)
Net Income799991(192)
Dividends on Preferred Stock of Subsidiaries4(4)
Net Loss Attributable to Noncontrolling Interests(63)(45)(18)
NET INCOME ATTRIBUTABLE TO SOUTHERN COMPANY$           862$       1,032$         (170)
Notes
– Certain prior year data may have been reclassified to conform with current year presentation.
Southern Company
Kilowatt-Hour Sales and Customers
(In Millions of KWHs)
Three Months Ended March
20232022ChangeWeather
Adjusted
Change
Kilowatt-Hour Sales-
Total Sales46,72548,728(4.1) %
Total Retail Sales-33,38235,155(5.0) %0.4 %
Residential10,63012,103(12.2) %1.2 %
Commercial10,88310,987(0.9) %1.8 %
Industrial11,72411,912(1.6) %(1.6) %
Other145153(4.9) %(4.0) %
Total Wholesale Sales13,34313,573(1.7) %N/A
(In Thousands of Customers)
Period Ended March
20232022Change
Regulated Utility Customers-
Total Utility Customers-8,8248,7550.8 %
Total Traditional Electric4,4494,3971.2 %
Southern Company Gas4,3754,3580.4 %
Southern Company
Financial Overview
As Reported
(In Millions of Dollars)
Three Months Ended March
20232022% Change
Southern Company –
Operating Revenues$        6,480$        6,648(2.5) %
Earnings Before Income Taxes8961,164(23.0) %
Net Income Available to Common8621,032(16.5) %
Alabama Power –
Operating Revenues$        1,647$        1,649(0.1) %
Earnings Before Income Taxes253458(44.8) %
Net Income Available to Common255347(26.5) %
Georgia Power –
Operating Revenues$        2,176$        2,208(1.4) %
Earnings Before Income Taxes349415(15.9) %
Net Income Available to Common296385(23.1) %
Mississippi Power –
Operating Revenues$            390$            33516.4 %
Earnings Before Income Taxes715042.0 %
Net Income Available to Common584238.1 %
Southern Power –
Operating Revenues$            508$            539(5.8) %
Earnings Before Income Taxes3215113.3 %
Net Income Available to Common1027241.7 %
Southern Company Gas –
Operating Revenues$        1,875$        2,058(8.9) %
Earnings Before Income Taxes412416(1.0) %
Net Income Available to Common309319(3.1) %
Notes
– See Financial Highlights pages for discussion of certain significant items occurring during the periods.

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