Summary
Southern Company (SO) reported its first quarter 2017 results, showcasing varied performance across its operating subsidiaries. Alabama Power demonstrated an 11.5% increase in net income, driven by rate increases and lower operating expenses, though partially offset by milder weather impacting revenues. Georgia Power experienced a slight decrease in net income, primarily due to milder weather, with retail revenues also declining. A significant concern highlighted is the ongoing uncertainty surrounding the Plant Vogtle Units 3 and 4 project, exacerbated by the bankruptcy of its primary contractor, Westinghouse, which could materially impact construction costs and schedules. Mississippi Power's results were heavily impacted by substantial charges related to the Kemper IGCC project, leading to a net loss for the quarter and raising going concern considerations, albeit with anticipated support from Southern Company. Southern Power's wholesale business saw a 40% increase in net income, benefiting from new renewable energy sales and tax credits. Southern Company Gas reported a strong increase in net income, primarily due to the recent acquisition of the remaining interest in SNG and positive performance in its gas distribution and marketing segments, though impacted by warmer weather.
Financial Highlights
46 data points| Revenue | $5.77B |
| Operating Expenses | $4.52B |
| Operating Income | $1.25B |
| Net Income | $665.00M |
| EPS (Basic) | $0.66 |
| EPS (Diluted) | $0.66 |
| Shares Outstanding (Basic) | 993.00M |
| Shares Outstanding (Diluted) | 1.00B |
Key Highlights
- 1Alabama Power's net income increased by 11.5% to $174 million, driven by rate increases and O&M cost reductions, partially offset by unfavorable weather.
- 2Georgia Power's net income decreased by 3.3% to $260 million, impacted by milder weather, and faces significant uncertainty regarding the Plant Vogtle construction project due to the contractor's bankruptcy.
- 3Mississippi Power reported a net loss of $20 million, largely due to an $108 million pre-tax charge related to the Kemper IGCC cost overruns, highlighting financial strain.
- 4Southern Power reported a 40% increase in net income to $70 million, fueled by new renewable energy sales and tax credits from newly placed-in-service wind and solar facilities.
- 5Southern Company Gas' net income increased significantly to $239 million, benefiting from the acquisition of SNG and regulatory rate adjustments, despite warmer weather impacting volumes.
- 6Southern Company's overall financial position is impacted by the varying performance of its subsidiaries, with particular concern around Mississippi Power's Kemper IGCC project and Georgia Power's Plant Vogtle.
- 7S&P revised its outlook for Southern Company and its subsidiaries from stable to negative on March 24, 2017.