Southern 3rd-Quarter Profit Down 12% on Clean Coal Project Charges

   By Tess Stynes 
 

Southern Co.'s (SO) third-quarter earnings fell 12% as the electric-power company posted a charge related to additional cost overruns and construction delays at its clean coal power project in Kemper County, Miss.

One of the largest U.S. utilities, Atlanta-based Southern's results have continued to be hit by charges to the Kemper project in recent quarters.

The latest hit to the company's bottom line--revealed in a filing with the Securities and Exchange Commission on Tuesday--brings total shareholder charges to $1.14 billion for the plant. The overall price tag for the project--meant to showcase technology for generating clean electricity from low-quality coal--was also raised Tuesday by $243 million to $5.24 billion, making it possibly the most expensive fossil-fuel power plant ever built in the U.S.

Southern also pushed back the plant's expected completion date to the end of 2014, replacing an earlier in-service date of May 2014.

Chief Executive Tom Fanning is expected to elaborate on this latest charge on Wednesday during the company's quarterly earnings call.

The latest quarter's results also were negatively influenced by cooler-than-normal temperatures and unusually heavy rainfall.

Southern reported profit of $869 million, down from $993 million a year earlier. On a per-share basis, which included preferred stock impact, earnings were down at 97 cents from $1.11.

Excluding items such as the $93 million charge related to the Kemper project, adjusted earnings were $1.08. The company had forecast $1.13 a share. Revenue totaled $5.02 billion, below estimates of analysts polled by Thomson Reuters for $5.34 billion.

Total retail sales volume was down 1.5%, including declines in residential and commercial demand that was partly offset by increased industrial volume.

Shares closed Tuesday at $42.39 and were inactive in recent premarket trading. The stock is down 8.5% over the past year, trailing the broader market.

Write to Tess Stynes at [e-mail]

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