Southern 2nd-Quarter Net Falls 52% on Higher Costs, Mild Weather

   By Melodie Warner 
 

Southern Co.'s (SO) second-quarter earnings fell 52% as increased construction costs and mild weather weighed on the electric-power company's results.

"The wet weather and unseasonably mild temperatures appear to have slowed economic activity, reduced energy demand and lowered margins due to increases in hydroelectric generation," said Chairman and Chief Executive Thomas A. Fanning.

Southern operates power utilities in Georgia, Florida, Alabama and Mississippi. The company's revenue performance has been mixed over the past year as milder weather pressured kilowatt-hour sales to retail customers.

Southern reported a profit of $297 million, or 34 cents a share, down from $623 million, or 71 cents, a year earlier. Excluding items such as increased cost estimates for Mississippi Power's Kemper County project and an insurance-related gain, earnings fell to 66 cents from 69 cents.

Revenue rose 1.6% to $4.25 billion.

Analysts polled by Thomson Reuters had most recently forecast per-share earnings of 68 cents on revenue of $4.3 billion.

Operating margin shrank to 15.1% from 27.3%.

Total energy sales, including wholesale sales, fell 4.6%.

Kilowatt-hour sales to retail customers declined 2.9%. Residential and commercial energy sales decreased 5.3% and 4.2%, respectively. Industrial energy sales were up 0.6%.

Shares closed Tuesday at $45.42 and were inactive premarket. The stock is up 6.1% so far this year.

Write to Melodie Warner at [e-mail]

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