Executive Summary
The Southern Company reported Q4 2024 results reflecting the strength and resilience of a large regulated utility framework, but with headwinds from capital intensity and rising financing costs. Revenue for the quarter was $6.341 billion, up 4.9% year-over-year, yet down 12.8% versus the prior quarter as seasonality and quarter-to-quarter timing affected top-line dynamics. Net income was $534 million, down 37.5% year-over-year and 65.2% quarter-over-quarter, yielding earnings per share of $0.50 (diluted $0.48). The quarter benefited from stable operating earnings but was weighed down by a substantial negative swing in total other income/expenses and ongoing high interest expense, underscoring the capital-intensive nature of regulated utilities in a higher-for-longer rate environment.
Operating metrics show a robust gross margin (41.97%) and an EBITDA margin of approximately 40.8%, with operating income of $1.059 billion and an operating income margin of 16.7%. However, free cash flow remained negative at $(0.576) billion for the quarter, despite solid operating cash flow of $2.173 billion, driven by heavy capital expenditure of $2.749 billion in QQ4 2024. The company ended the quarter with cash and cash equivalents of about $1.071 billion and net debt of roughly $65.2 billion, producing a total debt-to-capitalization of ~66.6% and an interest coverage of 1.42x, signaling elevated leverage and sensitivity to interest rate movements.
Looking ahead, The Southern Company continues to execute a capital program anchored in regulated rate-base growth and asset expansion (transmission, distribution, and regulated gas utilities). While ongoing capex supports earnings visibility, the near-term cash flow dynamics suggest continued focus on funding the capital plan through a mix of debt and equity and potential rate-case outcomes. Investors should monitor regulatory decisions, weather and demand variability, and the trajectory of interest costs as key drivers of FCF and credit metrics in 2025 and beyond.
Key Performance Indicators
QoQ: -55.32% | YoY:-12.34%
QoQ: -65.21% | YoY:-37.54%
QoQ: -64.29% | YoY:-35.90%
Key Insights
Revenue: $6.341 billion in Q4 2024, YoY +4.9%, QoQ -12.83% (Q4 2023 revenue: $6.045 billion; Q3 2024 revenue: $7.274 billion).
Gross Profit: $2.661 billion; Gross Margin: 41.97% (vs. 40.0–42% typical for a regulated utility).
Operating Income: $1.058 billion; Operating Margin: 16.69%.
EBITDA: $2.589 billion; EBITDA Margin: ~40.81%.
Net Income: $534 million; Net Margin: 8.42%; EPS: $0.50 (GAAP) and $0.48 (diluted).
Interest Expense: $693 million; Depreciation & Amortization: $1.350 billion....
Financial Highlights
Revenue: $6.341 billion in Q4 2024, YoY +4.9%, QoQ -12.83% (Q4 2023 revenue: $6.045 billion; Q3 2024 revenue: $7.274 billion).
Gross Profit: $2.661 billion; Gross Margin: 41.97% (vs. 40.0–42% typical for a regulated utility).
Operating Income: $1.058 billion; Operating Margin: 16.69%.
EBITDA: $2.589 billion; EBITDA Margin: ~40.81%.
Net Income: $534 million; Net Margin: 8.42%; EPS: $0.50 (GAAP) and $0.48 (diluted).
Interest Expense: $693 million; Depreciation & Amortization: $1.350 billion.
Total Other Income/Expenses Net: $(513) million (negative swing).
Income Before Tax: $545 million; Effective Tax Rate: 14.5%; Income Tax Expense: $79 million.
Cash Flow: Operating Cash Flow $2.173 billion; Capex (Investing in PP&E): $(2.749) billion; Free Cash Flow: $(0.576) billion.
Balance Sheet (selected): Total Assets $145.18 billion; Total Liabilities $108.51 billion; Total Stockholders’ Equity $33.21 billion.
Debt Metrics: Long-Term Debt $60.021 billion; Short-Term Debt $6.256 billion; Total Debt $66.277 billion; Net Debt $65.207 billion; Debt-to-Capitalization ~66.6%; Interest Coverage 1.42x.
Liquidity: Cash and Cash Equivalents $1.071 billion; Current Ratio 0.67; Quick Ratio 0.46; Cash Ratio 0.07.
Dividend: Dividend Yield 0.82%; Payout Ratio 137.5% (notable given negative free cash flow and high leverage).
Four-Quarters Trend (Q1–Q4 2024): Revenue growth and margin expansion moderated by seasonality; Net income declined YoY but EBITDA remained relatively stable, highlighting the anchored earnings in regulated operations.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
6.34B |
4.90% |
-12.83% |
| Gross Profit |
2.66B |
6.95% |
-32.68% |
| Operating Income |
1.06B |
-12.34% |
-55.32% |
| Net Income |
534.00M |
-37.54% |
-65.21% |
| EPS |
0.50 |
-35.90% |
-64.29% |
Key Financial Ratios
operatingProfitMargin
14.2%
operatingCashFlowPerShare
$1.98
freeCashFlowPerShare
$-0.7
dividendPayoutRatio
137.5%
Management Commentary
Note: No earnings call transcript data provided in the input. As a result, management quotes, themes, and transcript-derived insights could not be extracted. If available, the highlights would typically cover: strategy updates (rate-base investments, capital allocation, regulatory strategy), operational execution (maintenance cycles, reliability metrics), market conditions (weather-driven demand, regulatory environment), and financial outlook (guidance, capital structure, dividend policy).
Forward Guidance
No formal forward guidance in the provided data. Based on industry dynamics and the current financials, the following considerations apply: stability of regulated earnings supports long-term visibility, but near-term FCF remains challenged due to heavy capital expenditure and elevated debt servicing costs as interest rates influence financing costs. Investors should monitor: 1) regulatory approvals and rate cases that could affect allowed returns and timing of rate-base growth; 2) progress on transmission and distributionCapex that underpin earnings growth; 3) interest rates and debt costs impacting interest expense and coverage ratios; 4) weather intensity and demand patterns across service territories; and 5) management's capital-allocation strategy including dividends relative to free cash flow.