Southern Co (NYSE:SO) stock is sinking today on news of increasing costs to complete its Vogtle 3 & 4 nuclear energy plants.
Southern Co says that it is revising the amount of money that it is expecting to spend on the construction of these two nuclear plants. The company is now expecting the total cost of the construction to reach $8.40 billion.
That’s a major increase over the company’s previous cost estimate, which was sitting at $7.30 billion. To top it off, Southern Co also notes that it will be absorbing $700 million of the cost increase, rather than passing it on to customers.
“While there will always be challenges in building the first new nuclear units in this country in more than 30 years, we remain focused on reducing project risk and maintaining the current project momentum in order to provide our customers with a new carbon-free energy source that will put downward pressure on rates for 60 to 80 years,” Paul Bowers, Chairman, President and CEO of Georgia Power, said in a statement.
Southern Co also points out that it isn’t pushing back completion dates for the two nuclear plants. The company is still expecting to complete Vogtle 3 in 2021 and Vogtle 4 in 2022.
News of the increasing costs to construction for the Vogtle 3 & 4 plants is dragging SO stock down today despite it releasing a positive earnings report for the second quarter of the year. This includes earnings per share of 80 cents on revenue of $5.63 billion. Wall Street was looking for earnings per share of 69 cents on revenue of $5.30 billion for the period.
SO stock was down 4% as of Wednesday afternoon, but is also up 4% year-to-date.
As of this writing, William White did not hold a position in any of the aforementioned securities.