Southern (NYSE:SO) reported second-quarter 2026 adjusted earnings of $1.13 per share, up $0.21 from the prior-year period and $0.13 above the company’s estimate, as higher electricity usage, customer growth and construction-related earnings supported results.
Chief Financial Officer David Poroch said first-half adjusted earnings totaled $2.46 per share, above the company’s year-to-date expectations. Southern now expects full-year adjusted earnings to be near or at the top of its $4.50 to $4.60 per-share guidance range and provided a third-quarter adjusted EPS estimate of $1.65.
Large-load contracts drive growth outlook
During the quarter, Alabama Power added roughly 3 gigawatts through three projects, while Georgia Power signed a 25-year, 3.2-gigawatt electric-service agreement with OpenAI for a site near Savannah, Georgia. The OpenAI project is expected to begin taking service in phases beginning in 2028 and includes 1 gigawatt of flexible demand response.
Womack said the four projects together represent 6 gigawatts of newly contracted load. Including prior agreements, Southern’s electric subsidiaries now have more than 17 gigawatts of contracts and large-load agreements expected by the mid-2030s.
The company’s prospective pipeline of large industrial and data-center projects remains above 75 gigawatts. Beyond the 17 gigawatts already contracted, Southern identified another 8 gigawatts of projects in late stages, including 3 gigawatts it expects could be finalized in the near term. Poroch said several of those prospective projects are likely to start ramping in 2028 and continue into the next decade.
Southern’s systemwide data-center load exceeded 1.2 gigawatts during the quarter, an increase of more than 500 megawatts from a year earlier. Data-center usage rose 55% from the second quarter of 2025 and was up 49% year to date, according to Poroch.
Retail sales and customer additions increase
Weather-normalized retail electricity sales increased 2.3% in the first half from the same period last year, which Poroch said was the company’s strongest sales growth through June in nearly two decades. Sales increased across residential, commercial and industrial customer classes.
Southern added approximately 11,000 residential electric customers during the second quarter, bringing net electric customer additions to more than 40,000 over the past year. Weather-normalized commercial sales rose 7.4% in the second quarter and were 6% higher year to date.
The company cited manufacturing and reshoring activity in Alabama, including primary metals, stone, clay, glass and pipeline-related segments, as contributors to industrial demand. Announcements in Southern’s electric territories during the quarter represented nearly $14 billion in investment and more than 3,000 jobs, led by data-center facilities in Alabama and an Amazon warehouse in Georgia, Poroch said.
Generation needs could create investment opportunities
Southern said it has received approvals in recent years for 10 gigawatts of company-owned generation resources, including thermal, battery and solar assets, as well as hundreds of miles of transmission lines. Two battery sites are in service, while work continues on three combustion turbines at Plant Gaston.
Requests for proposals are underway at Alabama Power and Georgia Power for additional generation resources needed in the early 2030s. Poroch said any company-owned projects selected through the processes and approved by state public service commissions would represent incremental investment beyond Southern’s current capital plan.
Poroch said a rough rule of thumb for new generation capacity could be “about $2 billion or so” per gigawatt, covering a range of generation resources. He said spending related to potential projects could begin to enter the company’s projections around 2028, with assets potentially coming online in 2031 or 2032.
Southern also sees potential to expand investments in FERC-regulated pipeline infrastructure as electricity demand and potential gas-generation needs rise across the Southeast.
Rate protections and financing plans
Womack said Southern’s large-load agreements include minimum bills designed to recover at least 100% of the incremental cost to serve customers, along with termination-payment provisions and collateral requirements. He said the structure is intended to protect existing customers and investors while supporting rate stability.
Retail base rates at Southern’s two largest subsidiaries, Georgia Power and Alabama Power, are set to remain stable until 2029, according to the company. Womack said the OpenAI project’s demand-response capability can help reduce peak demand and benefit the broader system.
On financing, Poroch said Southern sourced an additional $700 million of equity through its at-the-market program during the second quarter, using forward contracts that can settle through 2028. The company said its projected remaining equity need through 2030 has declined to $1.1 billion and reiterated its goal of reaching roughly 17% funds from operations to debt by 2029.
Southern Power is also discussing opportunities to recontract assets as existing tolling arrangements expire. Womack said potential new agreements would involve energy and capacity under long-term power-purchase agreements rather than typical tolling structures.
About Southern (NYSE:SO)
Southern Company (NYSE: SO) is an Atlanta-based energy holding company that provides electric and gas utility services and owns power generation assets across the United States. Founded in 1945, the company operates a portfolio of regulated electric utilities and affiliated businesses that generate, transmit and distribute electricity to residential, commercial and industrial customers.
Southern’s principal regulated electric subsidiaries include Georgia Power, Alabama Power and Mississippi Power, which serve large portions of the southeastern United States.
