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Earnings analysis · 10-Q

SO earnings analysis

Filed November 4, 2026 · Our reading of the company's report

The latest report

Southern Company delivered a strong Q3 2026, with net income rising to $2.0 billion and EPS increasing to $1.77 from $1.55, driven primarily by higher retail electric revenues and Georgia Power demand from data centers.…

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Southern Company delivered a strong Q3 2026, with net income rising to $2.0 billion and EPS increasing to $1.77 from $1.55, driven primarily by higher retail electric revenues and Georgia Power demand from data centers. Southern Power also rebounded sharply, while Southern Company Gas weakened modestly. The main offset is a capital-intensive growth plan: investing cash outflows reached $10.403 billion year to date, PP&E increased $6.3 billion, and long-term debt increased $1.2 billion. Regulatory rate constraints and elevated construction funding needs remain the principal risks despite improved operating cash flow.

Read the original on SEC.gov

Gross and operating margin

How much of each revenue dollar the business keeps.

76% Gross margin Operating margin Apr 2023 Apr 2026

One point per quarterly or annual filing. Both margins are shares of that report's revenue.

Where revenue came from

The business segments reported by the company.

Retail electric revenues 69.2% Wholesale electric revenues 9.2% Natural gas revenues 8.1% Southern Power operating revenues 7.3% Other revenues 3.6% Other segments 2.6%

Shares of the segments disclosed in this filing, largest first.

How we read each report

Our analysis across the last few reports.

Read as bullish Read as bearish Apr 2023 Nov 2026

Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.

Reported figures

Earnings per share
$1.77

What stood out

  • Strong earnings and EPS growth

    Consolidated net income attributable to Southern Company increased to $2.0 billion, or $1.77 per share, from $1.7 billion, or $1.55 per share, in Q3 2025. EPS increased $0.22, or approximately 14.2%, year over year.

  • Retail electric demand accelerated

    Retail electric revenues rose $916 million, or 16.1%, to $6.6 billion. The increase included $322 million from rates and pricing, $150 million from sales growth, and $218 million from weather.

  • Georgia Power led electric growth

    Georgia Power retail revenues increased $723 million, or 21.5%, to $4.1 billion, supported by $296 million of rates and pricing and $115 million of sales growth. Weather-adjusted commercial KWH sales increased 10.2%, primarily due to data centers.

  • Southern Power rebounded

    Southern Power operating revenues increased $86 million, or 14.0%, to $699 million, while net income increased to $52 million from $3 million. PPA energy revenues increased $60 million, or 15.1%, and PPA capacity revenues increased $26 million, or 17.6%.

  • Operating cash flow improved

    Operating cash flow for Southern Company increased to $7.880 billion for the first nine months of 2026 from $7.205 billion, an increase of $675 million. Management attributed the increase primarily to higher net income after non-cash adjustments and the timing of vendor payments.

  • Large-load pipeline supports growth

    The company reported approximately 20 GW of new large-load contracts, including approximately 16 GW reviewed by applicable state PSCs and an additional approximately 4 GW subject to review. Service under the remaining contracts is expected to begin through 2029.

What to watch

  • Heavy capital spending and funding needs

    Southern Company reported $10.403 billion of investing cash outflows for the first nine months of 2026 versus $9.599 billion in the prior-year period, primarily for construction programs. Total property, plant, and equipment increased $6.3 billion, increasing funding and execution requirements.

  • Leverage and working-capital pressure

    Total long-term debt, including securities due within one year, increased $1.2 billion during the first nine months of 2026. Current liabilities exceeded current assets by $2.282 billion at September 30, 2026, although the company reported $8.909 billion of unused committed bank credit.

  • Regulatory constraints could limit recovery

    Georgia Power agreed to increase downward pressure on rates for non-large-load customers to at least $949 million per year on a levelized basis for 2029 through 2031. Separately, Alabama Power's retail base rates may not be increased before January 1, 2029 under legislation enacted April 2, 2026.

  • Renewable repowering weighs on earnings

    Southern Power's accelerated depreciation related to wind repowering projects increased depreciation and amortization by $228 million year to date. Remaining pre-tax accelerated depreciation is projected at approximately $95 million in 2026 and $117 million in 2027.

  • Gas segment cost and regulatory pressure

    Southern Company Gas operating expenses increased $32 million, or 10.2%, in Q3 2026, including $9 million of charges associated with the disallowance of certain Nicor Gas capital investments. Southern Company Gas net income declined $4 million, or 16.0%, to $21 million.

Management's outlook

No numeric revenue or EPS guidance was provided. Quantitative forward capital plans include Alabama Power estimated capital expenditures of $2.5 billion in 2027, $2.6 billion in 2028, $2.3 billion in 2029, $2.4 billion in 2030, and $2.8 billion in 2031. Southern Power expects remaining construction costs of $560 million to $620 million for turbine uprate projects, and Southern Company Gas expects project expenditures of $0.2 billion in Q4 2026, $0.4 billion in 2027, $0.6 billion in 2028, $1.2 billion in 2029, and $0.8 billion in 2030 for the Southeast Connector project.

Earlier filings 4

10-Q · April 29, 2026

Southern Company reported Q1 2026 revenue of $7.78 billion, reflecting a 7.2% increase from Q1 2025's $7.27 billion. Gross margin decreased to 68.9% while operating margin improved slightly to 25.9%. EPS remained stable…

10-K · February 19, 2026

Southern Company reports consolidated net income attributable of $4.341 billion and diluted EPS of $3.92 for 2025, with retail electric operating revenues of $23.777 billion for the electricity business. The company has…

10-Q · May 1, 2025

Southern Company reported first-quarter 2025 revenue of $7,775 million (up $1,129 million, +17.0% vs Q1 2024) and consolidated operating income of $2,010 million, supporting diluted EPS of $1.21 (vs $1.03 in Q1 2024).…

10-Q · August 1, 2024

Southern Company reported Q2 revenue of $6,463 million (Q2 2023: $5,748 million) and diluted EPS of $1.09 (Q2 2023: $0.76), driven by higher retail electric revenues and improved operating income. Operating income rose…

This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.