Southern Company Lifts 2026 Adjusted EPS Outlook to $4.70

Southern Company (SO ) reported higher third-quarter earnings on November 5, 2026, and raised its full-year adjusted earnings outlook as commercial electricity demand and data-center usage expanded. Net income attributable to the company increased to $2.046 billion, or $1.77 per basic share, from $1.711 billion, or $1.55, in the third quarter of 2025. Operating revenue rose 13.0% to $8.843 billion from $7.823 billion.

Excluding specified items, quarterly net income was $2.242 billion, or $1.94 per share, compared with $1.766 billion, or $1.60, a year earlier. Management raised its projected full-year 2026 adjusted earnings per share to $4.70. Its earnings presentation describes that target as 9% year-over-year growth and 10 cents above the original $4.50-$4.60 guidance range issued on February 19, 2026.

Demand and Costs Behind the Earnings Growth

The sales figures separate underlying demand from the weather’s contribution. Retail electricity sales increased 7.7%, but the weather-adjusted increase was 3.5%. Commercial sales grew 7.3% on that adjusted basis, compared with 1.8% for industrial customers and 1.3% for residential customers. The company reported third-quarter data-center usage up 59% from the prior year and 45,000 additional residential customers since the third quarter of 2025.

The traditional electric operating companies supplied most of the earnings, with net income rising to $2.272 billion from $1.920 billion; Southern Power improved to $52 million from $3 million. The per-share result also absorbed higher costs and dilution. The company’s adjusted EPS analysis assigned 21 cents of the year-over-year change to retail revenue impacts and 15 cents to weather, while non-fuel operations and maintenance subtracted 9 cents, interest expense and other subtracted 11 cents, and the increase in shares subtracted 9 cents.

The difference between the 34-cent increase in adjusted EPS and the 22-cent rise in reported EPS reflects the items excluded from the adjusted measure. These included a $118 million pre-tax charge, or $92 million after tax, for accelerated depreciation and decommissioning tied to Southern Power wind repowering; $43 million of debt-extinguishment costs, or $40 million after tax, along with a $57 million change in tax benefits related to the 2025 extinguishment; and an estimated $9 million Nicor Gas capital-investment loss, or $7 million after tax.

Large-Load Contracts Expand the Capital Program

Southern Company counts 21 gigawatts across 33 projects as contracted large load, including 4 gigawatts added since its second-quarter call. Thirty-one of those projects have broken ground and are underway, with a 17-year weighted-average contract length. Its contracted category covers fully signed agreements without material contingencies and arrangements fully agreed with customers but subject to regulator review. Another 7 gigawatts is in late-stage or finalizing stages, while more than 75 gigawatts remains prospective rather than contracted.

The contracting framework requires at least 15-year terms for data centers and 10 years for other customers. Minimum bills are intended to cover at least 100% of annual incremental service costs, termination payments are tied to the remaining incremental costs over the contract’s life, and collateral requirements are based on customer creditworthiness.

Management projected an $81 billion base capital plan through 2030 plus approximately $4 billion of additional identified projects, producing a total of roughly $85 billion; further opportunities could take the five-year plan toward approximately $100 billion. For the base plan and identified incremental spending, approximately $2 billion of equity remains to be addressed through 2030, and incremental capital is projected to be funded with approximately 40% equity.

The quarter shows both sides of that growth: electricity demand is supporting higher earnings and a raised annual target, while serving it requires long-duration contracts, substantial capital and further equity. The central issue for future results is how much of the large-load pipeline becomes operating demand, and how effectively Southern Company manages the costs and financing needed to serve it.