10-QPeriod: Q1 FY2021

SOUTHERN CO Quarterly Report for Q1 Ended Mar 31, 2021

Filed April 29, 2021For Securities:SOSOJESOJFSOJCSOJDSOMN

Summary

Southern Company reported a strong first quarter of 2021, with consolidated net income attributable to Southern Company increasing by 30.8% to $1.1 billion ($1.07 per diluted share) compared to the same period in 2020. This growth was primarily driven by higher natural gas and retail electric revenues, influenced by colder weather conditions and increased volumes, although partially offset by higher natural gas costs. The company's diversified segments, including traditional electric utilities and natural gas distribution, demonstrated resilience. Key operational highlights include significant year-over-year growth in natural gas revenues (35.6%) and wholesale electric revenues (30.4%), reflecting robust demand and improved pricing. Despite ongoing challenges related to the COVID-19 pandemic impacting customer usage in some areas, the company's proactive management of regulatory matters and infrastructure investments are supporting stable financial performance. Investors should note the ongoing significant capital expenditures related to the Plant Vogtle Units 3 and 4 construction, which incurred an additional estimated loss provision, but remain a critical long-term growth driver.

Financial Highlights

45 data points
Beta

Revenue

$6.90B

91.6% Gross Margin

Net Income

$1.14B

16.4% Net Margin

EPS (Diluted)

$1.06

Total Assets

$125.39B

Cash & Equivalents

$1.77B

Free Cash Flow

-$436.00M

Financial Statements
Beta
Revenue$6.90B
Cost of Revenue$583.00M
Gross Profit$6.32B
Operating Expenses$4.31B
Operating Income$1.60B
Net Income$1.14B
EPS (Basic)$1.07
EPS (Diluted)$1.06
Shares Outstanding (Basic)1.06B
Shares Outstanding (Diluted)1.07B

Key Highlights

  • 1Consolidated net income attributable to Southern Company increased by 30.8% to $1.1 billion in Q1 2021.
  • 2Earnings per diluted share rose to $1.07 in Q1 2021, up from $0.81 in Q1 2020.
  • 3Total operating revenues grew by 17.8% to $5.91 billion in Q1 2021.
  • 4Natural gas revenues saw a substantial increase of 35.6% to $1.7 billion, driven by colder weather and higher volumes.
  • 5Wholesale electric revenues increased by 30.4% to $545 million, benefiting from higher energy revenues and new power sales agreements.
  • 6Georgia Power recorded a $48 million pre-tax charge related to an increase in the estimated capital cost forecast for Plant Vogtle Units 3 and 4.
  • 7Southern Power acquired a controlling interest in the Deuel Harvest wind facility and continues construction on battery storage and wind projects.

Frequently Asked Questions

The primary driver of Southern Company's earnings growth in Q1 2021 was the significant increase in natural gas revenues, up 35.6%, and wholesale electric revenues, up 30.4%. This was supported by favorable weather conditions leading to higher energy demand and volumes, along with improved pricing for natural gas.

Yes, Georgia Power recorded a pre-tax charge of $48 million related to an increase in the estimated capital cost forecast for the ongoing construction of Plant Vogtle Units 3 and 4. The company continues to manage project timelines and costs amidst lingering impacts from COVID-19 and other construction challenges.

Southern Company and its subsidiaries engaged in various financing activities, including issuing $2.15 billion in long-term debt and $0.5 billion in short-term borrowings during the first quarter of 2021. These activities were primarily used to fund construction programs, repay existing debt, and for general corporate purposes, indicating active management of its capital structure.

The company anticipates continued growth driven by its electric utilities and natural gas distribution business. Southern Power is expanding its renewable energy portfolio with new acquisitions and ongoing construction projects. Southern Company Gas is investing in infrastructure improvements and expanding its customer base, supported by regulatory approvals and favorable market conditions.