Southern Company (The) Series 2

Adjusted EPS for the second quarter of 2026 was $1.13 per share, $0.21 higher than the second quarter of 2025 and $0.13 above estimate. First-half adjusted EPS was $2.46. Year-to-date weather-normal retail electricity sales were 2.3% higher than the first half of 2025, while weather-normal commercial sales grew 7.4% in the second quarter and 6% year to date. Data center usage was 55% higher than the second quarter of 2025 and 49% higher year to date; system-wide data center load now exceeds 1.2 GW, up more than 500 MW year over year. Management guided to full-year 2026 adjusted EPS near the top of the $4.50 to $4.60 range and gave a third-quarter adjusted EPS estimate of $1.50. They also said they sourced an additional $700 million of equity in the quarter and reduced projected remaining equity need by 2030 to $1.1 billion.

Christopher Womack’s tone was highly confident and growth-oriented. He emphasized that Southern is “performing exceptionally well,” with a major tailwind from data centers and other large-load customers, and said the company is capturing this growth in a way that benefits customers and communities. He repeatedly framed the business as being in a “transformative” period and stressed that the vertically integrated, state-regulated model is a differentiator for landing large-load projects while preserving rate stability.

David Poroch focused on the earnings beat, the strength of regulated customer growth, and the company’s financing plan. He said Q2 adjusted EPS of $1.13 benefited from increased usage, customer growth, higher AFUDC, equity-method earnings, tax impacts, and contributions from Southern Company Gas and PowerSecure, partly offset by higher interest expense and dilution. He also highlighted that the company expects full-year 2026 adjusted EPS near the top of the $4.50 to $4.60 range, has a Q3 estimate of $1.50, and is working toward 17% FFO to debt by 2029. On capital, he said Southern sourced an additional $700 million of equity via ATM forward contracts in Q2 and lowered the projected remaining equity need by 2030 to $1.1 billion.

Analysts pressed on how the newly visible load pipeline changes the regulatory and capital plan, and management said the stronger contract visibility increases flexibility but does not change their approach of working through regulators and RFPs. They also discussed whether incremental load could imply further generation needs; management said the open RFPs already reflect much of the known load, but there is potential upside beyond the current plan, with one rule of thumb given as roughly $2 billion or a little more for about 1 GW of new generation. Questions also focused on OpenAI, collateral, demand response, Southern Power recontracting, and nuclear; management said OpenAI’s 25-year deal includes minimum bills covering 100% of incremental cost, collateral supporting about an A- or better profile, and a 1 GW demand-response feature that is the first such data-center arrangement for Southern. On nuclear, Womack said Southern is not “next” but is actively engaging with the administration and other parties to help make new nuclear a reality.