Summary
Southern Company (SO) reported its first-quarter 2019 results, with a notable decrease in net income attributable to Southern Power compared to the prior year. This decline was primarily driven by a substantial reduction in state income tax benefits recorded in 2018 and lower production tax credits (PTCs) in 2019, partially offset by higher income from tax equity partnerships. The regulated utilities, Alabama Power and Georgia Power, experienced mixed results, with Alabama Power seeing a slight decrease in net income due to milder weather and higher O&M expenses, while Georgia Power's net income declined due to milder weather and increased O&M expenses. Southern Company Gas demonstrated resilience, with a slight decrease in net income, primarily impacted by natural gas price volatility in the prior year's comparison period, but saw improved underlying performance driven by infrastructure investments and rate changes in its gas distribution operations. Despite the overall mixed performance, the company continues to focus on its long-term growth strategy, including ongoing construction of major projects like Plant Vogtle. Financial condition remained stable across the subsidiaries, with robust liquidity and access to capital markets. Investors should monitor the progress and costs associated with Plant Vogtle, the ongoing regulatory proceedings for Southern Company Gas, and the company's ability to manage operating expenses across its diverse utility and energy services businesses.
Financial Highlights
45 data points| Revenue | $5.41B |
| Cost of Revenue | $686.00M |
| Gross Profit | $4.73B |
| Operating Expenses | $1.72B |
| Operating Income | $3.69B |
| Net Income | $2.06B |
| EPS (Basic) | $2.01 |
| EPS (Diluted) | $1.99 |
| Shares Outstanding (Basic) | 1.04B |
| Shares Outstanding (Diluted) | 1.04B |
Key Highlights
- 1Southern Power's net income attributable to Southern Power decreased by 53.7% to $56 million, primarily due to a $50 million reduction in state income tax benefits from a prior year's legal entity reorganization and a $39 million decrease in Production Tax Credits (PTCs).
- 2Alabama Power's net income after dividends on preferred stock decreased by 3.6% to $217 million, mainly due to milder weather leading to lower retail revenues and an increase in non-fuel operations and maintenance expenses.
- 3Georgia Power's net income decreased by 11.6% to $311 million, attributed to lower retail revenues from milder weather and higher non-fuel operations and maintenance expenses.
- 4Southern Company Gas' net income decreased by 3.2% to $270 million, impacted by natural gas price volatility in the prior year's comparison period, but underlying performance in gas distribution operations improved due to infrastructure investments and rate changes.
- 5Georgia Power is proceeding with the construction of Plant Vogtle Units 3 and 4, with the total project capital cost forecast remaining at $8.4 billion, and expected in-service dates of November 2021 for Unit 3 and November 2022 for Unit 4.
- 6Southern Company completed the sale of Gulf Power in January 2019 for approximately $5.8 billion, resulting in a preliminary pre-tax gain of $2.5 billion.
- 7All of Southern Company's subsidiaries reported compliance with their respective debt covenants and maintained adequate liquidity through committed credit arrangements and access to capital markets.