Southern Co. (SO), the second-largest U.S. power company by market value, said second-quarter profit rose as it benefited from economic recovery in the four southeastern states it serves.
Net income rose to $623 million, or 71 cents a share, from $604 million, or 71 cents, a year earlier, Atlanta-based Southern said in a statement today. Excluding an insurance settlement related to its former Mirant Corp. subsidiary, per- share profit met the 69-cent average of 13 analysts’ estimates compiled by Bloomberg.
Southern added 20,000 new residential customers in the first half of 2012, more than it had expected to gain for the year. “The future continues to look bright for our region,” Chairman and Chief Executive Officer Thomas Fanning said in the statement.
Sales fell 7.5 percent to $4.18 billion from $4.52 billion a year earlier, in what was “an unusually warm second quarter in 2011,” the company said. Retail sales decreased 1.9 percent and residential sales fell 4.3 percent, while commercial and industrial dropped 1.4 percent and 0.1 percent, respectively.
Demand for power declined as consumers ran air conditioners less than a year earlier, Mark Barnett, a Chicago-based equity analyst with Morningstar Inc. (MORN), said in a phone interview before the results were announced.
Southern also faces potential cost overruns and delays as it builds the first new U.S. nuclear reactors since the 1970s. Southern and its partners have been negotiating who should pay $400 million in costs resulting from a half-year delay in licensing the two reactors at Vogtle, 26 miles (42 kilometers) southeast of Augusta, Georgia.
“We expect a good bit of detail on Vogtle to be updated” during Southern’s earnings call, Barnett said.
Southern has 4.4 million customers in Alabama, Mississippi, Georgia and Florida and the capacity to produce 42,000 megawatts of electricity, according to its website. That’s enough power for about 33.6 million typical homes, according to a U.S. Energy Department estimate.
The company’s results were announced before the start of regular U.S. trading. Southern fell 1.1 percent to $47.11 yesterday in New York. The shares have three buy, 15 hold and four sell recommendations from analysts.
Duke Energy Corp. (DUK) is the largest U.S. utility owner by market value.
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