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GEORGIA POWER CO (GPJA)·Q1 2024 Earnings Summary

Executive Summary

  • Georgia Power segment delivered strong Q1 2024 results: operating revenues rose 10.2% to $2.398B and net income increased 47.6% to $437M versus Q1 2023 . Consolidated Southern Company reported revenue of $6.646B (+2.6% YoY) and diluted EPS of $1.03 .
  • Weather-adjusted retail electric sales increased 1.7% YoY, led by commercial class (+3.8% weather-adjusted); management highlighted 12% YoY growth in sales to data centers as a key driver .
  • Plant Vogtle Unit 4 achieved commercial operation in April, making Vogtle the largest generator of clean energy in the U.S. and positioning Georgia Power with more than 2,200 MW of new carbon-free baseload capacity .
  • Incremental capital expected: Georgia PSC approved 500 MW of owned battery energy storage; management flagged >$500M to <$1B incremental CapEx (including a Southern Power solar expansion) subject to certifications, and raised the annual dividend to $2.88 (+$0.08) .
  • Wall Street consensus from S&P Global was unavailable at time of request; management noted adjusted EPS of $1.03 was $0.13 above their internal estimate, but this is not a substitute for Street consensus .

What Went Well and What Went Wrong

What Went Well

  • Georgia Power segment performance: operating revenues +10.2% YoY to $2.398B; net income +47.6% YoY to $437M, reflecting stronger utility revenues and supportive regulation .
  • Demand strength and data center tailwind: “All our businesses experienced a strong start to 2024... higher weather-adjusted sales in our electric utilities’ commercial customer class... increased usage by many existing data center customers” .
  • Strategic milestone: “Plant Vogtle Unit 4 successfully achieved commercial operation... Units 3 and 4 now deliver more than 2,200 megawatts of reliable 24/7 carbon-free energy” .

What Went Wrong

  • Cost headwinds: interest expense increased by $83M YoY and depreciation and amortization rose by $34M YoY, partially offsetting revenue growth .
  • Wholesale volume softness: total wholesale sales declined 15.5% YoY, and Southern Power contributed a -$0.01 EPS factor in the quarter .
  • Regulatory overhang: management flagged uncertainty from new EPA rules as “impractical” in the current load-growth and technology context, potentially complicating generation retirements and resource planning .

Financial Results

Consolidated Southern Company vs prior periods

MetricQ1 2023Q4 2023Q1 2024
Operating Revenues ($USD Billions)$6.480 $6.045 $6.646
Operating Income ($USD Billions)$1.218 $1.207 $1.703
Operating Income Margin (%)18.8% (calc from )20.0% (calc from )25.6% (calc from )
Net Income ($USD Billions)$0.862 $0.855 $1.129
Diluted EPS ($)$0.79 $0.78 $1.03

Georgia Power segment vs prior periods

MetricQ1 2023Q4 2023Q1 2024
Operating Revenues ($USD Billions)$2.176 $2.313 $2.398
Earnings Before Income Taxes ($USD Millions)$349 $636 $516
Net Income ($USD Millions)$296 $533 $437

EPS bridge and drivers (Consolidated SO)

EPS DriverQ1 2024 vs Q1 2023
Retail Sales+4¢
Retail Revenue Impacts+16¢
Weather+6¢
Wholesale & Other Operating Revenues+3¢
Depreciation & Amortization-2¢
Interest Expense & Other-5¢
Income Taxes-3¢
Total Traditional Electric Operating Companies+19¢
Southern Power-1¢
Southern Company Gas+9¢
Parent Company & Other-3¢
Total Change in EPS (Excl. Items)+24¢

KPIs (system volumes and customers)

KPIQ1 2023Q1 2024Weather-Adjusted Change
Total Retail KWh Sales (Millions)33,382 35,254 +1.7%
Residential KWh (Millions)10,630 11,876 +1.0%
Commercial KWh (Millions)10,883 11,474 +3.8%
Industrial KWh (Millions)11,724 11,768 +0.4%
Wholesale KWh (Millions)13,343 11,275 N/A
Regulated Utility Customers (Thousands)8,824 8,900 +0.9%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EPS (company estimate, not Street)Q2 2024Not stated$0.90Established
Annual DividendOngoing$2.80$2.88Raised (+$0.08)
Georgia Power Owned Battery Energy StorageResource plan~220 MW assumed in outlook500 MW authorizedRaised (resource approval)
Incremental CapEx (incl. Southern Power solar expansion)Multi-yearNot included in Feb outlook>$500M to <$1BRaised (pending certifications)

Note: Wall Street consensus via S&P Global was unavailable at time of request; we therefore do not present Street EPS/revenue guidance comparisons.

Earnings Call Themes & Trends

TopicQ3 2023 (prior-2)Q4 2023 (prior-1)Q1 2024 (current)Trend
Data center and commercial loadSE economic development driving higher projected usage; Georgia Power filed IRP update Focus on strong FY results; Vogtle 3 completion highlighted Weather-adjusted retail sales +1.7% YoY; commercial +3.8%; data center sales +12% YoY (¾ from existing centers) Accelerating load narrative in Georgia; now with quantification
Nuclear strategy (Vogtle)—Vogtle 3 in commercial operation reaffirmed Vogtle 4 in service; >2,200 MW carbon-free; largest U.S. clean energy generator Major strategic completion; baseload capacity added
Regulation & pricingIRP update filed in Georgia —GA PSC IRP update approved; flexible pricing frameworks; RTP rate; quarterly load updates to PSC; election schedule certainty 2025–2028 Constructive regulatory backdrop supporting growth
Affordability & derisking——Management emphasizing pricing at marginal cost; benefits to be incorporated in 2025 rate case; derisked outlook Improved customer affordability narrative
EPA rules/retirements——EPA rules viewed as impractical; potential implications for coal/gas CCUS feasibility; timeline impacts under review Regulatory headwinds acknowledged

Management Commentary

  • “All our businesses experienced a strong start to 2024… higher weather-adjusted sales in our electric utilities’ commercial customer class… increased usage by many existing data center customers.” — Christopher C. Womack
  • “For the first quarter of 2024, our adjusted EPS was $1.03 per share… $0.13 above our estimate… One worth highlighting is the higher than expected weather-adjusted electricity sales in our commercial customer class… Sales to data centers were up over 12%.” — Daniel S. Tucker
  • “Plant Vogtle Unit 4 successfully achieved commercial operation… With all 4 units operational, the Vogtle site is now the largest generator of clean energy in the country.” — Christopher C. Womack
  • “The Georgia PSC approved… 500 megawatts of owned storage… all told you’re somewhere above $500 million, a little south of $1 billion” incremental CapEx (subject to certifications). — Daniel S. Tucker

Q&A Highlights

  • Sensitivity to volume: “~$20–$40M for a 1% change in sales” depending on mix; helpful for assessing commercial/data center impacts .
  • CapEx and growth: Incremental CapEx >$500M to <$1B tied to PSC-approved storage and a Southern Power solar expansion; management sees an “upward bias” to earnings within the 5–7% range if momentum persists .
  • Regulatory clarity: Georgia legislature set commissioner election schedule (2025–2028); consumer advocacy bill did not pass, preserving current commission framework for the 2025 IRP and rate case .
  • Pipeline of large loads: “12 [data centers] under construction that total about ~2,400 MW” underscores sustained growth pipeline .
  • EPA rules: Management described recent EPA rules as “impractical,” with potential implications for retirement timelines and technology feasibility (e.g., CCUS), pending further analysis .

Estimates Context

  • S&P Global Wall Street consensus for Q1 2024 EPS and Revenue was unavailable due to API request limit at the time of retrieval; as a result, we cannot present beat/miss versus Street consensus for GPJA/Southern Company in this report [GetEstimates errors].
  • Company commentary indicated adjusted EPS of $1.03 was $0.13 above internal estimate; however, internal estimates are not a substitute for Street consensus comparisons .

Key Takeaways for Investors

  • Georgia Power segment strength: double-digit revenue growth (+10.2%) and ~48% net income growth in Q1 2024 point to robust demand and constructive regulation, with commercial/data center usage a clear catalyst .
  • Structural capacity tailwind: Vogtle 4 adds long-lived, zero-carbon baseload; combined with flexible pricing and IRP approvals (500 MW BESS authorized), Georgia Power is positioned to serve accelerating load while managing affordability .
  • Near-term trading: Without Street consensus available, focus on qualitative beats (commercial strength, data center +12%, weather-adjusted gains) and margin expansion (operating margin to 25.6%) as supportive of sentiment .
  • Medium-term thesis: Incremental CapEx (> $500M to < $1B) appears accretive even with equity funding; management sees “upward bias” within the 5–7% growth range if momentum continues, with dividend raised to $2.88 .
  • Risks: Higher interest expense, EPA regulatory uncertainty, and wholesale volume softness warrant monitoring; management emphasizes risk-adjusted load forecasting and upfront customer-funded local distribution upgrades to protect existing customers .
  • Watch items: Quarterly PSC updates on Georgia load; 2025 rate case economics for incorporating customer benefits; data center pipeline (12 under construction; ~2,400 MW) and pricing discipline under RTP framework .
  • Actionable: Track upcoming certifications/RFPs for storage and generation, and any additional IRP updates in Alabama/Mississippi (Mississippi process underway; Alabama in spring 2025) that could expand the investment runway .