Southern Co.’s financial performance has continued to improve on the back of strong economic growth in Georgia and other Southern states, executives said in an earnings call May 2.
The company’s businesses “experienced a strong start” in the first quarter of 2024, CFO Dan Tucker said, with Southern reporting an overall net income of $1.13 billion through March 31, up from $862 million for the same period last year. Earnings per share for the quarter stood at $1.03, 13 cents above the company’s estimate and 24 cents higher than the first quarter of 2023.
The company reported total operating revenue of $6.65 billion, compared to $6.48 billion in the first quarter of 2023, with operating expenses of $4.94 billion, down from $5.26 billion last year.
Among the factors contributing to income growth, Tucker highlighted stronger-than-expected electricity sales to commercial customers in general and data centers in particular, with revenue from the latter category growing more than 12% in the quarter. Retail electric sales to all classes of customers were up 1.7% from the first quarter of 2023, Tucker said, while industrial sales grew only 0.4% but were “beginning to show signs of recovery following a soft 2023,” with increased revenue from the lumber and paper industries.
The CFO pointed to the average unemployment rate of 3% across the company’s electric territories and said strong growth is likely to continue, with “a favorable business climate and increased expansion of manufacturing … attracting new households to the Southeast.”
CEO Chris Womack called the company’s performance “a testament to our team’s collective commitment to serving customers reliably across our business.” He said Southern is “positioned as well or better than any utility company in the country” to continue improving.
Womack also applauded the end of the “at-times … arduous journey” of constructing units 3 and 4 at the nuclear-powered Plant Vogtle, operated by Southern subsidiary Georgia Power near Waynesboro, Ga. Work on the new reactors wrapped up just days before the call with Unit 4 entering commercial operation on April 29, while Unit 3 did so on July 31, 2023. (See Southern Looks Beyond Vogtle After Challenging 2023.)
Construction began on units 3 and 4 in 2009, with both originally intended to be operational by 2017. The company has called the reactors the first nuclear generators built in the U.S. in 30 years. However, the project underwent numerous delays and cost overruns, with some observers estimating a final bill of $35 billion, around $21 billion over the initial budget.
“I cannot be prouder of our team’s perseverance and commitment to getting Vogtle units 3 and 4 completed with the standard of quality fully demonstrated by Unit 3’s performance since it [entered] service last July,” Womack said. “Success on this historic project required the hard work and dedication of tens of thousands of American craft workers and engineers, a committed group of co-owners, and regulators who had the courage to support nuclear when others did not.”
Womack said completion of the plant was proof “that new nuclear is achievable in the United States [to meet] ever-increasing demands for carbon-free energy … to support our digital economy and society.”
The CEO expanded on the need for nuclear energy later in the call, saying that “no technology is better suited” for the economy’s needs. At the same time, he admitted that in light of the delays and budget issues at Vogtle, it would likely be “a very long time” before Southern attempts more nuclear construction, and called on the federal government to “provide great leadership” to sway the industry to build more reactors.
