Abstract | 1Q23_The Southern Company_JPMorgan

1. Southern Company (SO) reported a strong Q1 2023 EPS beat, driven by better-than-expected results in the electric, gas, and power segments and offsetting higher D&A and interest expense headwinds.

2. SO reiterated its 2023 guidance range of $3.55-$3.65 and maintained the projected in-service dates for Vogtle Units 3 and 4, with GA Power's share of total capital costs remaining unchanged. Hot functional testing on Unit 4 is 80% complete, and Unit 4 ITAAC completion has trended better than expected.

3. Weather-normal residential and commercial sales for the quarter outperformed expectations, while industrial sales lagged behind.

4. Coal's percentage of SO's total energy mix reduced to 14%, and renewable energy increased to 18%.

Southern Company (SO) reported a strong Q1 2023 EPS beat with an adjusted EPS of $0.79, surpassing both the Street Median and JPMe of $0.71/$0.72. The better-than-expected results in the electric, gas, and power segments drove the beat, offsetting higher D&A and interest expense headwinds. Mild weather represented a net -11c YoY headwind, which was in line with the JPMe expectations.

Southern Company (SO) reiterated its 2023 guidance range of $3.55-$3.65, which is in line with JPMe and Street Median expectations. The company also maintained the projected in-service dates for Vogtle Units 3 and 4, with Unit 3 expected to be operational by May or June 2023 and Unit 4 expected to be operational from late 4Q 2023 through the end of 1Q 2024. GA Power's share of total capital costs for the project remains unchanged. SO noted that hot functional testing on Unit 4 is 80% complete and that Unit 4 ITAAC completion has trended better than expected. Further commentary on Vogtle is expected during the call.

Southern Company (SO) reported that weather-normal residential and commercial sales for the quarter outperformed expectations, with a 1.2% increase in residential sales and a 1.8% increase in commercial sales. However, industrial sales lagged behind with a -1.6% decrease. Moreover, coal's percentage of SO's total energy mix reduced to 14%, down from 20% in 2022, while renewable energy increased to 18%, up from 15% in 2022.