Southern Co., the third-largest U.S. utility owner by market value, reported a drop in third-quarter profit on cooler weather as costs related to its Kemper coal-gasification plant rose.
Net income was $869 million, or 97 cents a share, compared with $993 million, or $1.11, in the year-earlier quarter, Atlanta-based Southern said today in a statement on PRNewswire. Per-share profit excluding one-time items was 3 cents lower than the $1.11 average of 15 analysts’ estimates compiled by Bloomberg.
Southern’s $5 billion Kemper project in Mississippi has faced a series of cost overruns and delays. The plant is designed to convert coal to a gas and extract heat-trapping carbon dioxide before burning it to spin power-generating turbines.
Southern can’t recover plant costs that exceed $2.88 billion under a settlement it reached with Mississippi regulators earlier this year. The company will lose out on a $133 million investment tax credit after saying earlier this month that the construction of the plant will be delayed until the fourth quarter of 2014.
Profit was also hurt by cooler-than-normal temperatures and unusually heavy rainfall in the quarter, Southern said in today’s statement.
Southern supplies power to 4.4 million homes and businesses in Georgia, Florida, Alabama and Mississippi. Its plants can produce 43,000 megawatts, enough to power 34 million average U.S. homes.
The shares have four buy, 15 hold and five sell recommendations from analysts. Before today, they were little changed this year.
Duke Energy Corp. is the largest U.S. power company by market value, followed by Dominion Resources Inc.