The Southern Company Q2 FY2023 Earnings Call

· Earnings call transcript and AI-powered summary

Key Highlights

  • Plant Vogtle Unit 3 achieved commercial operation, providing over 1,100 MW of carbon-free baseload energy. This marks a major milestone after more than a decade of development.
  • Unit 4 remains on track with no changes to the capital cost forecast. Expected in-service date remains late Q4 2023 to Q1 2024.
  • Hot functional testing and regulatory milestones for Unit 4 have advanced more efficiently than for Unit 3, reflecting lessons learned.
  • Southern Company reaffirmed its commitment to a constructive regulatory environment, system resiliency, and expanding renewable generation.

Financial Performance

  • Adjusted EPS for Q2 2023 was $0.79, which is:
    • $0.04 above management's estimate for the quarter.
    • $0.28 below Q2 2022, driven by mild weather, higher depreciation, amortization, and interest expense.
  • Weather impact: First half of 2023 was the mildest on record in 129 years. Weather created a negative $0.16 EPS variance relative to normal—Southern Company’s largest first-half weather-driven shortfall ever.
  • Customer growth remained strong with 24,000 new electric and 13,000 new natural gas customers year-to-date, exceeding pre-pandemic levels.
  • 2023 Q3 adjusted EPS estimate is $1.30.

Operational and Market Trends

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Operator: Good afternoon. My name is Tommy, and I will be your conference operator today. At this time, I would like to welcome everyone to The Southern Company Second quarter 2023 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded, Thursday, August 3rd, 2023. I would now like to turn the call over to Mr. Scott Gammill, Vice President, Investor Relations and Treasurer. Please, go ahead, sir. Scott Gammill: Thank you, Tommy. Good afternoon and welcome to Southern Company’s second quarter 2023 earnings call. Joining me today are Chris Womack, President and Chief Executive Officer of Southern Company, and Dan Tucker, Chief Financial Officer. Let me remind you, we’ll be making forward-looking statements today in addition to providing historical information. Various important factors could cause actual results to differ materially from those indicated in the forward-looking statements, including those discussed in our Form 10-K, Form 10-Q, and subsequent filings. In addition, we will present non-GAAP financial information on this call. Reconciliations to the applicable GAAP measure are included in the financial information we released this morning, as well as the slides for this conference call, which are both available on our Investor Relations website at investor.southerncompany.com. At this time, I’ll

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