Nov 5, 2026, 8:09 AM ETUtilities

Southern Company — Third Quarter 2026 Earnings Summary

ALP-PQALABAMA POWER CO

Source

Financial Performance

Reported third-quarter 2026 net income of $2.0 billion ($1.77 per share), compared to $1.7 billion ($1.55 per share) in the third quarter of 2025.
Year-to-date 2026 net income was $4.6 billion ($4.02 per share), compared to $3.9 billion ($3.56 per share) for the same period in 2025.
Non-GAAP net income (excluding items) for the third quarter of 2026 was $2.2 billion ($1.94 per share), compared to $1.8 billion ($1.60 per share) in 2025.
Year-to-date non-GAAP net income was $5.0 billion ($4.40 per share), compared to $4.1 billion ($3.76 per share) in 2025.
Third-quarter 2026 operating revenues were $8.8 billion, a 13.0% increase from $7.8 billion in the third quarter of 2025.
Year-to-date 2026 operating revenues were $24.2 billion, a 7.3% increase from $22.6 billion in the corresponding period of 2025.
Traditional Electric Operating Companies contributed $2.3 billion in net income for the quarter and $4.7 billion year-to-date.
Southern Power reported $52 million in net income for the quarter and $30 million year-to-date.
Southern Company Gas reported $21 million in net income for the quarter and $593 million year-to-date.
Adjusted earnings drivers for the third quarter included warmer weather, increased usage, customer growth, and higher earnings from Southern Power, partially offset by higher non-fuel operating expenses, taxes other than income taxes, and dilution from additional shares.
Non-fuel operations and maintenance expenses increased by $205 million year-over-year for the quarter and $261 million year-to-date.
Taxes other than income taxes increased by $146 million for the quarter and $129 million year-to-date.
Interest expense increased by $87 million for the quarter and $72 million year-to-date.

Guidance and Future Outlook

Management stated the Southeast is growing at an "unprecedented and transformational" pace and that the company is well-positioned for future demand.
Accelerated depreciation and decommissioning costs associated with wind facility repowering at Southern Power are projected to continue through the third quarter of 2027.
Remaining pre-tax accelerated depreciation and decommissioning costs are projected to total approximately $100 million in 2026 and $135 million in 2027.
Future transaction costs related to debt extinguishment may occur at Southern Company or unregulated subsidiaries, though amounts and timing are uncertain.
Further charges related to Nicor Gas capital investments disallowed by the Illinois Commerce Commission may occur, with amounts and timing uncertain.
Further charges and/or credits related to Plant Vogtle Units 3 and 4 may occur, with amounts and timing uncertain.
Future impacts from past and future disposition activities may occur, with amounts and timing uncertain.

Business Segments and Product Lines

Traditional Electric Operating Companies:
- Alabama Power operating revenues increased 8.2% to $2.5 billion for the quarter and 4.2% to $6.6 billion year-to-date.
- Georgia Power operating revenues increased 18.6% to $4.5 billion for the quarter and 8.3% to $10.7 billion year-to-date.
- Mississippi Power operating revenues increased 3.5% to $497 million for the quarter and 5.5% to $1.4 billion year-to-date.
Southern Power: Operating revenues increased 14.0% to $699 million for the quarter and 10.9% to $1.9 billion year-to-date.
Southern Company Gas: Operating revenues increased 5.3% to $773 million for the quarter and 10.6% to $3.9 billion year-to-date.
Total regulated utility customers reached 8,996 thousand as of September 30, 2026, up 0.7% from 8,934 thousand in 2025.
Total retail kilowatt-hour sales increased 7.7% to 45,653 million for the quarter and 3.6% to 120,221 million year-to-date.
Residential retail sales increased 10.2% for the quarter and 2.1% year-to-date.
Commercial retail sales increased 10.1% for the quarter and 7.4% year-to-date.
Industrial retail sales increased 2.5% for the quarter and 1.4% year-to-date.
Total wholesale sales increased 6.2% for the quarter and 9.2% year-to-date.

Market and Competitive Landscape

The company serves 9 million customers across the Southeast and beyond.
The company operates electric utilities in three states, natural gas distribution companies in four states, a competitive generation company, a distributed energy solutions provider, a fiber optics network, and telecommunications services.
Management highlighted the importance of reliable energy and the company's focus on serving growing demand in the Southeast.
The company noted that variations in demand for electricity and natural gas, including projected significant growth driven by data centers and other large load customers, create capital access and revenue recovery risks.

Risks and Challenges

Risks include federal and state legal and regulatory changes, including tax, environmental, and other laws.
Costs and legal requirements related to coal combustion residuals and current or future litigation or regulatory investigations.
Entry of additional competition, including from alternative energy sources.
Uncertainties related to projected significant growth in electricity demand driven by data centers and the requirement for substantial new generation and transmission investments.
Customer affordability matters and fluctuations in fuel and commodity costs.
Challenges in completing pipeline expansion or infrastructure projects, including limits on capacity and public support.
Operational interruptions, cost and schedule overruns, labor shortages, inflation, trade policies, and delays due to judicial or regulatory action.
Risks associated with nuclear generating facilities, including accidents and environmental risks.
Cyber intrusion or physical attacks on the electric grid or natural gas infrastructure.
Global and U.S. economic conditions, including geopolitical conflicts, recession, inflation, and interest rate fluctuations.
Catastrophic events such as wildfires, hurricanes, floods, and other storms.
Changes in credit ratings and access to capital markets.

Management Commentary and Tone

Chris Womack, Chairman, President, and CEO, stated the Southeast is growing at an "unprecedented and transformational" pace.
Womack emphasized the company's scale, experience, and customer-focused strategy to serve demand in a responsible and sustainable manner.
Management expressed pride in improving communities and states served and maintaining discipline, credibility, and customer focus.
An earnings call with Womack and CFO David P. Poroch was held on November 5, 2026, to discuss earnings and provide a general business update.

Other Key Points

Southern Company repurchased certain convertible senior notes and redeemed certain junior subordinated notes, resulting in a $43 million loss on extinguishment of debt in the third quarter of 2026.
Southern Company Gas recorded an estimated loss of $9 million related to capital investments disallowed by the Illinois Commerce Commission in November 2025.
Southern Company Gas received a state income tax refund of $9 million associated with the 2018 disposition of Elizabethtown Gas, partially offset by contingency fee expenses.
Southern Power incurred pre-tax charges of $118 million for accelerated depreciation and decommissioning costs related to wind facility repowering.
The company has nearly 30,000 employees dedicated to delivering service.
Diluted earnings per share were $1.76 for the quarter and $4.00 year-to-date in 2026.