Southern Co. Profit Edges Higher, Revenue Slips

Southern Co., one of the biggest utilities in the U.S., said warmer weather and customer growth helped lift second-quarter profit more than 2%, though sales declined and the company took a bigger hit from its delayed Kemper County plant project.

Chief Executive Thomas Fanning said that for the first time since 2004, the company has had consecutive quarters of weather-normalized growth in all three customer classes. Residential energy sales rose 4.6% while commercial sales grew 2.3%. Adjusted for weather, residential sales rose 1.2% and commercial sales increased 0.7%.

The Atlanta company's results in recent quarters have been dogged by charges stemming from its Kemper County project, a clean-coal power plant under construction in Mississippi that had been expected to provide a bright future for the coal industry. Southern, which has repeatedly delayed completion dates, was dealt a blow in May when South Mississippi Electric Power Association--which furnishes power to smaller utilities in the state--pulled its investment in Kemper.

The company during the quarter booked a $14 million after-tax charge related to Kemper construction delays, more than double the charge booked in the first quarter.

Southern, which previously said that it doesn't expect to bring the Kemper facility online until the first half of next year, didn't provide an update in Wednesday's news release.

For the quarter, Southern reported a profit of $643 million, up from $628 million a year earlier. On a per-share basis after the payout of preferred dividends, earnings rose a penny to 69 cents. Excluding the loss stemming from Kemper, earnings per share were 71 cents.

Revenue declined 2.9% to $4.34 billion. Fuel revenue fell 13%, while non-fuel revenue increased 4.4%.

Analysts anticipated 69 cents in earnings per share and $4.67 billion in revenue, according to Thomson Reuters.

Write to Lisa Beilfuss at [e-mail]