Southern Company expands grid and renewable investments for long-term stability

Overview

Southern Company delivered solid financial performance in 2024, with full-year net income rising to $4.4bn ($4.02 per share), up from $4.0bn in 2023. Revenue grew to $26.7bn, supported by higher retail electricity sales, regulated rate adjustments, and customer growth. Despite higher non-fuel operating expenses and increased interest costs, the company maintained strong earnings stability, particularly in its electric utility and gas businesses.

President and CEO Christopher C. Womack stated: “The hard work and dedication of our team members across our company made 2024 an outstanding year for Southern Company. We delivered the exceptional value that our customers depend on, and, looking ahead, we believe our commitment to sustainably meeting the growing energy needs of our local economies will support our continued success for years to come.”

Q4 2024 vs. Q4 2023:

• Revenue rose to $6.3bn (+4.9% YoY), driven by higher electricity and natural gas sales.
  • Southern Power segment revenue declined to a value of $417m (-17.1% YoY), impacted by lower wholesale energy pricing. In the same way, Southern Company Gas declined to $1.24bn (-3.8% YoY).
  • Alabama Power revenue increased to $1.75bn (+7.4% YoY), while Georgia Power grew to $2.59bn (+11.8% YoY).
• Net income was on a fairly strong downward trend, reaching the value of $534m (-37.5% YoY), impacted by higher interest expenses and increased operations and maintenance costs.
• EPS recorded a value of $0.49 (vs. $0.78 in Q4 2023), reflecting lower profitability.
• Operating income was $1.06bn (-12.3% YoY), mainly due to cost increases and depreciation charges.

Full-Year 2024 highlights:

• Total revenue reached to $26.7bn (+5.8% YoY), supported by rate adjustments and customer growth.
  • Georgia Power (revenue of $11.33bn) and Alabama Power (revenue of $7.55bn) posted revenue growth of 12% and 7.1% YoY, while Southern Power (revenue of $2.01bn) faced declines of 8% YoY, due to lower wholesale pricing.
  • Southern Company Gas segment also had revenue of $4.46bn (-5.2% YoY).
• Net income rose to $4.4bn (+10.7% YoY), driven by higher revenue and operational efficiencies, with EPS of $4.02 (compared to $3.64 in 2023), reflecting strong earnings growth.
• Operating income recorded a value of $7.07bn (+21.3% YoY), supported by higher energy demand.

Southern Company anticipates another year of stable performance in 2025, balancing growth investments with regulatory compliance. The company projects low single-digit revenue growth, supported by stable customer expansion and efficiency improvements, with EPS expected between $4.10 – $4.25. Capital expenditures of approximately $8.5bn will focus on grid modernization, renewable energy projects, and Plant Vogtle-related developments. Southern remains committed to consistent dividend growth, reinforcing strong shareholder returns. Additionally, ongoing investments in natural gas infrastructure, grid reliability, and carbon reduction initiatives will support long-term sustainability and operational resilience.

After the main results reported were above Wall Street analysts’ estimates, SO shares experienced a price appreciation of approximately +2%, subsequently maintaining this trend until the end of the trading week, when the price approached the $89 threshold.

Author: Andreea-Roxana Danci