The Southern Company (SO) Bundle
A Brief History of The Southern Company
Company Overview
The Southern Company, a large utility holding company based in the United States, operates through several subsidiaries. It primarily provides electricity to millions of customers across the southeastern U.S. The company is known for its extensive portfolio of energy resources, including natural gas, coal, nuclear, and renewable energy sources.
Financial Performance in 2024
As of 2024, The Southern Company has shown a robust financial performance, with significant increases in net income and capital contributions. The table below summarizes key financial metrics for 2024:
| Period | Net Income (in millions) | Capital Contributions (in millions) | Cash Dividends (in millions) | Total Assets (in millions) |
|---|---|---|---|---|
| Q1 2024 | 762 | 113 | (513) | 22,070 |
| Q2 2024 | 1,050 | 700 | (512) | 22,433 |
| Q3 2024 | 1,050 | 750 | (513) | 23,671 |
Stock Performance
As of September 30, 2024, The Southern Company's common stock was trading at $90.18 per share, with a book value of $30.39 per share, resulting in a market-to-book ratio of 297%.
Operational Highlights
In 2024, the company placed significant emphasis on its nuclear projects, particularly the completion of Plant Vogtle Units 3 and 4. The total project capital cost forecast for these units is approximately $10.732 billion, with net investment incurred through September 30, 2024, amounting to $10.649 billion.
Debt and Financing Activities
The Southern Company has engaged in various financing activities in 2024, including:
- Issuing $1.5 billion in convertible senior notes due June 15, 2027.
- Repaying $600 million in senior notes and other debt obligations totaling approximately $863 million.
- Entering into new short-term loans totaling $200 million.
Regulatory Environment
In 2024, Georgia Power, a subsidiary of The Southern Company, increased its annual retail base rates by $318 million effective August 1, 2023, based on the in-service date of Unit 3. This rate adjustment reflects the significant investments made in infrastructure and energy generation capabilities.
Conclusion of Operational Insights
The Southern Company continues to adapt to changing market conditions and regulatory requirements while focusing on sustainable energy solutions and operational efficiency.
A Who Owns The Southern Company (SO)
Major Shareholders
As of 2024, The Southern Company (SO) has a diverse ownership structure with significant institutional and individual shareholders.
| Shareholder Type | Percentage Ownership | Number of Shares Owned (in millions) |
|---|---|---|
| Institutional Investors | 62.5% | 685.9 |
| Retail Investors | 37.5% | 412.1 |
Top Institutional Investors
The following institutional investors are among the largest shareholders of The Southern Company:
| Institution | Shares Owned (in millions) | Percentage of Total Shares |
|---|---|---|
| The Vanguard Group | 98.4 | 8.95% |
| BlackRock, Inc. | 94.7 | 8.54% |
| State Street Corporation | 52.3 | 4.75% |
| Capital Research Global Investors | 40.1 | 3.65% |
| Fidelity Investments | 32.5 | 2.95% |
Executive Ownership
Key executives and board members also hold significant stakes in the company. The following table details their ownership:
| Name | Title | Shares Owned (in thousands) |
|---|---|---|
| Christopher C. Womack | Chairman, President, and CEO | 250 |
| Martin B. Davis | Executive Vice President | 150 |
| J. Jeffrey Peoples | Chairman of Alabama Power | 100 |
Recent Shareholder Changes
In 2024, The Southern Company reported the issuance of approximately 4.8 million shares primarily through employee equity compensation plans, which may impact ownership distribution.
Market Performance
As of September 30, 2024, The Southern Company's common stock was trading at $90.18 per share, with a market-to-book ratio of 297%.
Dividends and Financial Metrics
The Southern Company declared a quarterly dividend of $0.72 per share in Q3 2024, reflecting a steady increase from $0.70 per share in Q3 2023.
Summary of Financial Data
For the nine months ended September 30, 2024, The Southern Company reported total operating revenues of $20.383 billion and consolidated net income of $3.867 billion.
| Financial Metric | Value (in millions) |
|---|---|
| Operating Revenues | $20,383 |
| Net Income | $3,867 |
| Total Assets | $143,956 |
| Common Stock Dividend | $0.72 per share |
The Southern Company (SO) Mission Statement
Mission Overview
The Southern Company's mission statement emphasizes its commitment to providing reliable and affordable energy while ensuring environmental stewardship and community engagement. The company aims to be a leader in the energy sector by innovating and investing in sustainable solutions.
Financial Performance
As of the third quarter of 2024, Southern Company reported a consolidated net income of $1.5 billion ($1.40 per share), compared to $1.4 billion ($1.30 per share) for the same period in 2023. For year-to-date 2024, the consolidated net income was $3.9 billion ($3.53 per share), an increase from $3.1 billion ($2.86 per share) in 2023.
Operating Revenues
The company's operating revenues for the third quarter of 2024 totaled $7.3 billion, an increase from $7.0 billion in the same quarter of 2023. Retail electric revenues were $5.4 billion for the third quarter of 2024, up from $5.1 billion in 2023.
| Financial Metrics | Q3 2024 | Q3 2023 | Year-to-Date 2024 | Year-to-Date 2023 |
|---|---|---|---|---|
| Consolidated Net Income | $1.5 billion | $1.4 billion | $3.9 billion | $3.1 billion |
| Net Income per Share | $1.40 | $1.30 | $3.53 | $2.86 |
| Operating Revenues | $7.3 billion | $7.0 billion | $20.4 billion | $19.2 billion |
| Retail Electric Revenues | $5.4 billion | $5.1 billion | $13.8 billion | $12.6 billion |
Capital Expenditures
The Southern Company has outlined significant capital expenditures primarily related to its construction programs. In October 2024, Alabama Power's Board approved an estimated capital expenditure of $2.2 billion for 2025.
Community and Environmental Initiatives
The Southern Company is committed to environmental stewardship, investing in renewable energy sources, and reducing carbon emissions. The company has made substantial investments in solar and wind energy projects, contributing to its goal of achieving net-zero carbon emissions by 2050.
Employee Engagement and Safety
Employee safety and engagement are pivotal to the Southern Company's mission. The company continually invests in training programs and safety measures, aiming to cultivate a workforce dedicated to operational excellence and community service.
Strategic Goals
- Innovation: Invest in technology to enhance energy efficiency and customer service.
- Sustainability: Lead the transition to a clean energy future through renewable energy sources.
- Community Engagement: Foster strong relationships with local communities and stakeholders.
- Operational Excellence: Ensure reliable energy delivery while maintaining cost efficiency.
Conclusion
The Southern Company continues to align its mission with its financial performance and strategic goals, focusing on delivering value to customers, shareholders, and communities while prioritizing sustainability and innovation.
How The Southern Company (SO) Works
Company Overview
The Southern Company operates as a leading energy provider in the United States, primarily engaged in the generation, transmission, and distribution of electricity. It serves approximately 9 million customers across the southeastern region of the United States.
Financial Performance
As of the third quarter of 2024, the Southern Company reported consolidated net income of $1.5 billion, which is $1.40 per share, compared to $1.4 billion ($1.30 per share) for the same period in 2023. Year-to-date, the net income was $3.9 billion ($3.53 per share) compared to $3.1 billion ($2.86 per share) in 2023.
| Metric | Q3 2024 | Q3 2023 | Year-to-Date 2024 | Year-to-Date 2023 |
|---|---|---|---|---|
| Net Income (in millions) | 1,535 | 1,432 | 3,794 | 3,053 |
| Earnings per Share (Basic) | $1.40 | $1.30 | $3.53 | $2.86 |
| Total Operating Revenues (in millions) | 7,274 | 6,980 | 20,383 | 19,208 |
Revenue Sources
Southern Company derives revenues from various segments including retail and wholesale electricity sales, natural gas distribution, and other services. The breakdown for the third quarter of 2024 is as follows:
| Revenue Source | Q3 2024 (in millions) | Q3 2023 (in millions) |
|---|---|---|
| Retail Electric Revenues | 5,366 | 5,139 |
| Wholesale Electric Revenues | 721 | 727 |
| Natural Gas Revenues | 682 | 689 |
| Other Revenues | 283 | 222 |
Operating Expenses
For the third quarter of 2024, total operating expenses were reported as follows:
| Expense Type | Q3 2024 (in millions) | Q3 2023 (in millions) |
|---|---|---|
| Fuel Expenses | 1,146 | 1,367 |
| Purchased Power Expenses | 249 | 207 |
| Other Operations and Maintenance | 1,662 | 1,424 |
| Depreciation and Amortization | 1,210 | 1,143 |
Segment Performance
The Southern Company's reportable segments include traditional electric operating companies, Southern Power, and Southern Company Gas. Key performance metrics for the segments are as follows:
| Segment | Operating Revenues (Q3 2024, in millions) | Net Income (Q3 2024, in millions) |
|---|---|---|
| Traditional Electric Operating Companies | 5,927 | 1,618 |
| Southern Power | 600 | 82 |
| Southern Company Gas | 682 | 38 |
Market Performance
As of September 30, 2024, the market price of Southern Company's common stock was $90.18 per share, with a book value of $30.39 per share, representing a market-to-book ratio of 297%.
Capital Expenditures and Future Investments
Southern Company's capital expenditures are projected to be significant, with estimated amounts of $2.2 billion for 2025 and $2.1 billion for each of 2026, 2027, and 2028, primarily for construction and compliance with environmental regulations.
| Year | Estimated Capital Expenditures (in billions) |
|---|---|
| 2025 | 2.2 |
| 2026 | 2.1 |
| 2027 | 2.1 |
| 2028 | 2.1 |
Regulatory Environment
The Southern Company operates in a highly regulated environment, impacting its ability to recover costs and set rates. Regulatory mechanisms include rate designs that help mitigate the impact of weather fluctuations on revenues.
Conclusion
The Southern Company continues to focus on operational efficiency, regulatory compliance, and strategic investments to enhance its service offerings and financial performance.
How The Southern Company (SO) Makes Money
Overview of Revenue Sources
The Southern Company generates revenue through several key segments: retail electric sales, wholesale electric sales, and natural gas sales. As of 2024, these segments contribute significantly to its overall financial performance.
Retail Electric Revenues
In the third quarter of 2024, retail electric revenues were reported at $5.4 billion, an increase from $5.1 billion in the same period of 2023. For the year-to-date, retail electric revenues reached $13.8 billion, compared to $12.6 billion in 2023.
| Category | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | YTD 2024 Revenue (in millions) | YTD 2023 Revenue (in millions) |
|---|---|---|---|---|
| Residential | 2,651 | 2,477 | 6,551 | 5,717 |
| Commercial | 1,991 | 1,583 | 5,075 | 4,464 |
| Industrial | 1,184 | 483 | 3,019 | 2,770 |
| Other | 33 | 3 | 94 | 84 |
Wholesale Electric Revenues
Wholesale electric revenues for Q3 2024 were $721 million, slightly down from $727 million in Q3 2023. Year-to-date, wholesale revenues stood at $1.92 billion, compared to $1.93 billion in the prior year.
- PPA energy revenues: $300 million in Q3 2024, up from $58 million in Q3 2023.
- PPA capacity revenues: $190 million in Q3 2024, compared to $24 million in Q3 2023.
- Non-PPA revenues: $67 million in Q3 2024, down from $34 million in Q3 2023.
Natural Gas Revenues
In the third quarter of 2024, natural gas revenues were $682 million, a slight decrease from $689 million in the same period of 2023. Year-to-date natural gas revenues totaled $3.2 billion, down from $3.4 billion in 2023.
| Category | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | YTD 2024 Revenue (in millions) | YTD 2023 Revenue (in millions) |
|---|---|---|---|---|
| Rate changes | 6 | - | 196 | - |
| Gas costs and other cost recovery | 4 | - | (335) | - |
| Gas marketing services | (2) | - | (15) | - |
| Other | (15) | - | (43) | - |
Other Revenues
Other revenues reached $283 million in Q3 2024, compared to $222 million in Q3 2023. For the year-to-date period, other revenues amounted to $820 million, an increase from $662 million in 2023.
Operating Income and Expenses
For year-to-date 2024, total operating revenues were $20.4 billion, while total operating expenses were $14.4 billion, resulting in an operating income of $6 billion.
| Operating Expenses Category | YTD 2024 Expenses (in millions) | YTD 2023 Expenses (in millions) |
|---|---|---|
| Fuel | 3,174 | 3,376 |
| Purchased power | 669 | 680 |
| Cost of natural gas | 852 | 1,199 |
| Other operations and maintenance | 4,543 | 4,352 |
| Depreciation and amortization | 3,537 | 3,365 | Taxes other than income taxes | 1,155 | 1,076 |
Net Income
Consolidated net income attributable to Southern Company was $3.9 billion for the year-to-date 2024, compared to $3.1 billion in 2023. The earnings per share for the same period were $3.53, up from $2.86 in 2023.
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Article updated on 8 Nov 2024
Resources:
- The Southern Company (SO) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of The Southern Company (SO)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View The Southern Company (SO)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.