Southern Company Q3 Profit Rises to $2 Billion as Revenue Grows 13%

Southern Company reported a 19.6% increase in third-quarter profit as warmer weather and stronger electricity demand helped lift revenue across its utility operations. Net income attributable to the Atlanta-based energy provider rose to $2.046 billion from $1.711 billion a year earlier, according to results released Thursday, November 5.

Operating revenue climbed 13% to $8.843 billion from $7.823 billion, an increase of $1.02 billion. Basic earnings per share rose to $1.77 from $1.55, although the per-share gain was smaller than the rise in total profit because the company had more shares outstanding.

The quarter showed two sources of growth that matter differently for an electric utility: additional power consumption tied to weather and expanding demand from customers. Southern’s operating income rose to $3.0 billion from $2.594 billion, even as several expense categories grew. The results cover the three months ended September 30.

Electricity demand increased beyond the weather effect

Southern’s third-quarter earnings release attributed the improvement in adjusted profit to warmer weather, higher customer usage, customer growth and increased revenue from large commercial and industrial users. Higher earnings at Southern Power, its competitive generation business, also contributed.

Retail electricity sales totaled 45.653 billion kilowatt-hours, up 7.7% from 42.369 billion in the corresponding quarter. After adjusting for weather, the company reported retail sales growth of 3.5%. That difference is important: unusually hot conditions can increase air-conditioning demand, but weather-adjusted figures offer a clearer measure of underlying consumption trends.

Residential electricity sales increased 10.2% on a reported basis, yet were up only 1.3% after the weather adjustment. Commercial sales grew 10.1%, or 7.3% on a weather-adjusted basis, while industrial sales rose 2.5%, or 1.8% after adjusting for weather. The commercial figures indicate a broader expansion in demand than the residential increase alone would suggest.

Customer additions were more gradual. Regulated utility customers numbered 8.996 million at the end of September, compared with 8.934 million a year earlier, an increase of 0.7%. Electricity consumption therefore grew considerably faster than the overall customer count. That distinction helps explain why sales volumes and revenue rose without a similarly large expansion in the number of accounts served.

The revenue breakdown also reflects more than the number of kilowatt-hours sold. Non-fuel retail electric revenue reached $5.132 billion, up from $4.442 billion. Retail revenue collected for fuel rose to $1.491 billion from $1.265 billion. Fuel-related revenue and the corresponding costs do not necessarily contribute to profit in the same way as non-fuel revenue, so the 13% headline increase should not be read as an equivalent increase in earnings capacity.

Georgia Power accounts for much of the profit improvement

Georgia Power, the group’s largest traditional electric utility by quarterly revenue, reported $1.523 billion in net income available to common shareholders, compared with $1.248 billion a year earlier. Its operating revenue increased 18.6% to $4.471 billion from $3.770 billion, making the Georgia business a substantial contributor to the group’s year-over-year improvement.

Alabama Power earned $661 million, up from $588 million, on revenue of $2.509 billion. Mississippi Power’s earnings rose to $89 million from $84 million. Together, the traditional electric operating companies reported $2.272 billion in net income, compared with $1.920 billion in the previous-year quarter.

Performance was less uniform outside those regulated electric utilities. Southern Power earned $52 million, compared with just $3 million a year earlier. Southern Company Gas, by contrast, reported $21 million in quarterly net income, down from $25 million, even as its operating revenue increased 5.3% to $773 million.

At the parent-company and other level, the reported loss widened to $299 million from $237 million. Those costs offset part of the gains generated by the operating businesses, underscoring why the results of an individual utility should not be mistaken for the parent company’s consolidated profit. Chief Executive Chris Womack characterized the Southeast’s economic and electricity-demand growth as an important backdrop for the company’s plans.

Adjusted earnings rose faster, but expenses also increased

Excluding specified items, Southern reported third-quarter earnings of $2.242 billion, compared with $1.766 billion in the prior-year period. Adjusted basic earnings per share increased to $1.94 from $1.60. These are company-defined non-GAAP figures and should be read alongside, rather than substituted for, the reported results.

The $196 million difference between reported and adjusted quarterly profit reflects several items identified in the reconciliation. Southern Power recorded $118 million in pretax accelerated depreciation and decommissioning charges associated with repowering certain wind facilities. Southern also incurred $43 million in pretax costs related to extinguishing debt, while its gas business recognized an estimated $9 million pretax loss tied to Nicor Gas capital investments disallowed by Illinois regulators. Related tax adjustments also affected the reconciliation.

Ordinary operating costs were moving higher as well. Non-fuel operations and maintenance expenses increased to $1.848 billion from $1.643 billion, while taxes other than income taxes rose to $434 million from $288 million. Net interest expense, after capitalized amounts, increased to $842 million from $755 million. Those increases absorbed some of the benefit from higher utility revenues and power sales.

The average number of shares outstanding increased to 1.157 billion from 1.102 billion. As a result, the 19.6% gain in reported net income translated into a roughly 14% increase in basic earnings per share. The share count is especially relevant when comparing absolute earnings growth with what existing shareholders earned per share.

Nine-month results show growth alongside continuing project costs

For the first nine months of 2026, Southern reported $4.577 billion in net income attributable to the company, compared with $3.925 billion in the year-earlier period. Basic earnings per share increased to $4.02 from $3.56. Operating revenue for the nine months reached $24.218 billion, an increase of 7.3% from $22.572 billion.

On the company’s adjusted basis, nine-month earnings grew to $5.017 billion from $4.135 billion, with adjusted basic earnings per share rising to $4.40 from $3.76. The different growth rates for reported and adjusted profit illustrate the effect that project-related expenses and other excluded items have had on the year-to-date comparison.

Wind-facility repowering remains a source of future charges. As of September 30, Southern projected approximately $100 million of additional pretax accelerated depreciation and decommissioning costs during the remainder of 2026 and about $135 million in 2027. The affected projects were expected to reach completion at various points through the third quarter of 2027. Those amounts and dates are forecasts, not completed costs.

The figures leave two distinct measures of operating progress for the coming quarters: how much electricity demand persists after weather effects are stripped out, and how much of that growth reaches earnings after operating costs, financing expenses and project charges. The company’s stated wind-repowering schedule provides a concrete timetable for one of the remaining earnings adjustments.