SO Q3 2026 Earnings Analysis

Hey everyone. And yeah, Alex, this one's packed. Southern basically came out and said "we're doing better than we thought, and we think we're going to keep doing better than we thought." That's a good problem to have.

Important stuff. Okay, let's talk numbers.

And the kicker — they're now guiding to $4.70 for full-year 2026, which is $0.10 above the top end of their original guidance range. That's roughly 9% earnings growth for the year. For a regulated utility, that's a really strong number.

Right, this is the part I find fascinating. Weather-normal sales growth was up 3.5% in the quarter, 2.7% year-to-date — they're calling that the highest level of sales growth in generations. And data centers are the headline driver: usage was up 59% in the quarter, 52% year-to-date.

Nope. And it's broad-based too — commercial sales up 7.3%, residential up 1.3% with 15,000 new electric customers added, and industrial demand climbing across primary metals, lumber, and transportation. This isn't a one-trick data-center pony; it's the whole Southeast economy heating up.

Which brings total announced investment in their service territory to over $45 billion for the year — by far their biggest year ever. And that matters for Southern because more industrial activity means more electricity demand means more rate base growth.

But here's the eye-popping part: management said the plan could "potentially approach $100 billion" over five years if pending RFPs in Alabama and Georgia result in new company-owned generation. They've got 21 gigawatts of signed large-load contracts already, with another 7 gigawatts in late-stage negotiations.

The financing side is worth flagging too. They've now settled all $5.3 billion of previously forward-priced equity, and they're leaning on roughly $27 billion in low-cost Department of Energy loans. They're targeting about 40% equity funding for incremental capital, and still pushing toward that 17% FFO-to-debt target by 2029. So even with a bigger capital plan, they're trying to keep the balance sheet investment-grade and disciplined.

That affordability angle keeps coming up, and for good reason — it was a top voter concern in the recent elections. Southern's counter is pretty concrete: Georgia Power actually cut rates this summer, saving the average residential customer about $50 a year, with $180 in annual savings promised down the line. And they've committed to holding base rates flat in Alabama and Georgia until at least 2029.

There was also a great exchange on nuclear — Womack was clear Southern isn't chasing new nuclear builds themselves right now, but he praised federal efforts to get new nuclear projects moving industry-wide. And when asked about collateral requirements from these massive data center contracts — reportedly around $25 billion by 2030 — Poroch said they're managing credit risk through parent guarantees and letters of credit, keeping their effective counterparty credit quality around A- to AA.

Everything discussed is AI-generated analysis for educational purposes. Past performance doesn't guarantee future results. Please do your own due diligence.

That said, the setup here is pretty compelling on paper — 25 consecutive years of dividend increases, accelerating structural demand, and a capital plan that, if it scales toward $100 billion, represents meaningful rate-base growth for years to come. The open questions are really about execution: will the RFP-driven capacity actually get built, and can they keep navigating the politics around affordability and data centers as new regulators take their seats.

Thanks for listening, everyone — we'll catch you next time.