DOW JONES NEWSWIRES
Southern Co.'s (SO) second-quarter earnings rose a
better-than-expected 15% on a prior-year charge.
But the electric utility continued to see reduced demand,
especially from industrial customers, where sales volume dropped
18%. Chief Executive David Ratcliffe said, "It is clear that as
this challenging economy continues, our revenue erosion is
significant, particularly among our industrial and manufacturing
customers."
Power companies have been using cost cuts as one way to balance
the demand drop-off, but reductions are getting harder, prompting
them to turn to state regulators to raise rates.
Southern Co., whose business is focused in the Southeast,
reported a profit of $478.6 million, or 61 cents a share, up from
$416.4 million, or 54 cents a share, a year earlier. The prior-year
included 9 cents in charges. The company in April projected
earnings of 55 cents to 60 cents for the latest quarter, below
analysts' forecasts at the time.
Revenue decreased 7.8% to $3.89 billion. Analysts polled by
Thomson Reuters most recently were looking for $4.28 billion.
Total retail energy sales fell 6.5%, with kilowatt-hour sales
down 0.9% for residential customers and 0.6% for commercial users.
Total sales including its wholesale business dropped 8%.
Southern Co., among the biggest U.S. coal-burning utilities,
like other power generators is in transition amid pushes to reduce
carbon-dioxide emissions. Southern was one of four power companies
expected to split $18.5 billion in federal financing to build the
next generation of nuclear reactors. The company also is involved
in efforts to capture and store greenhouse-gas emissions from
coal-fired power plants and is planning to expand its presence in
industrial-scale plants that burn wood and other plant material -
or "biomass."
Shares closed at $32 on Tuesday and didn't trade premarket. The
stock is down 14% this year.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
tess.stynes@dowjones.com