Summary
Southern Company (SO) reported a strong performance for the nine months ending September 29, 2016, with significant increases in net income driven by higher retail revenues across its operating companies, particularly Alabama Power and Georgia Power. These increases were bolstered by favorable weather conditions and rate adjustments. Southern Company's acquisition of Southern Company Gas in July 2016 was a major event, adding a new segment and diversifying the company's energy portfolio. While the integration is ongoing, the company noted that Southern Company Gas's operations are now included in consolidated financial statements. Across the subsidiaries, Southern Power showed substantial growth in operating revenues and net income, primarily due to new renewable energy project acquisitions and PPAs. Despite the overall positive financial results, Mississippi Power faced significant challenges due to its Kemper IGCC project, which continued to experience cost overruns and schedule delays, resulting in substantial charges to earnings. The company is actively managing these issues with regulatory bodies and has ongoing legal proceedings related to the project. Gulf Power's earnings were impacted by the expiration of wholesale contracts for Plant Scherer Unit 3, leading to a rate case filing to address cost recovery. Overall, the report highlights continued strategic investments in growth and renewable energy by Southern Power, alongside the integration of the natural gas business. However, investors should remain aware of the significant financial and operational challenges faced by Mississippi Power related to the Kemper IGCC project.
Financial Highlights
47 data points| Revenue | $6.26B |
| Operating Expenses | $4.35B |
| Operating Income | $1.92B |
| Net Income | $1.18B |
| EPS (Basic) | $1.18 |
| EPS (Diluted) | $1.17 |
| Shares Outstanding (Basic) | 968.00M |
| Shares Outstanding (Diluted) | 975.00M |
Key Highlights
- 1Net income for the nine months ended September 30, 2016, increased significantly for Southern Company and its subsidiaries, driven by higher retail revenues and new renewable energy projects.
- 2Southern Company completed the acquisition of Southern Company Gas on July 1, 2016, integrating a natural gas distribution business into its portfolio.
- 3Southern Power demonstrated strong growth, with increased operating revenues and net income, attributed to the acquisition and construction of new solar and wind facilities.
- 4Mississippi Power recorded substantial pre-tax charges related to cost revisions for the Kemper IGCC project, totaling $222 million for the nine months ended September 30, 2016.
- 5Gulf Power's net income declined year-over-year, impacted by the expiration of wholesale capacity sales from Plant Scherer Unit 3, with a rate case filed to address cost recovery.
- 6Alabama Power's net income increased by 18.6% in Q3 2016 compared to Q3 2015, driven by higher revenues and lower operating expenses.
- 7Georgia Power's net income increased by 8.5% in Q3 2016 compared to Q3 2015, primarily due to higher base revenues and warmer weather.