(Adds comments from CEO about climate-change bill starting in
10th paragraph.)
DOW JONES NEWSWIRES
Southern Co.'s (SO) third-quarter profit climbed 1.2% as the
utility company was helped by cost cuts and increased service
charges amid still-sliding demand and cooler-than-average weather
that hurt revenue.
The Southeastern U.S.-focused company has continued to see
reduced demand, especially from industrial customers, during the
economic downturn. Southern, one of the largest owners of
coal-powered plants in the U.S., has cut costs and begun working on
alternative-energy projects amid a push for reduced carbon-dioxide
emissions.
The company said Wednesday industrial sales have started to pick
up, as it saw an 11% sequential increase in that segment.
"While the economy continues to take its toll, we are seeing
signs of stabilization and what may be the beginnings of recovery
in certain sectors in our region," said Chief Executive Officer
David M. Ratcliffe.
Southern reported third-quarter earnings of $790 million from
$780.4 million, but fell to 99 cents from $1.01 on a per-share
basis as stock outstanding rose 3.2%. Revenue fell 14% to $4.68
billion.
Analysts polled by Thomson Reuters had most recently forecast
earnings of 98 cents on $5.5 billion in sales.
Kilowatt-hour sales fell 6.1%--2.6% for residential customers,
3.6% for commercial customers and 9.6% for industrial
customers.
Southern is regarded as the utility most likely to first begin
construction on the next generation of nuclear reactors, using part
of $18.5 billion in federal financing. Even as other companies'
plans for plants have been rejected, Southern says it expects its
plant in Georgia to enter service around 2016.
Southern also is trying to capture and store greenhouse
emissions from coal-fired plants and expand its presence in
biomass-burning plants.
Southern CEO Ratcliffe said in an interview that he doesn't
expect Congress to pass climate-change legislation this year as
health-care reform takes precedence in Congress. The Senate version
of the climate-change bill should mirror the House version, which
allows utilities to use energy-efficiency measures to comply with a
requirement to produce or buy 20% of their electricity from
renewable sources by 2020, Ratcliffe said.
Southern has opposed a renewable-energy standard, arguing that
such a requirement would place an undue burden on electricity
customers in the Southeastern U.S., where wind and other renewable
resources are less plentiful.
The House bill also lets utilities make "alternative compliance"
payments to farmers and other landowners for environmentally
friendly projects, which could benefit Southern ratepayers,
Ratcliffe said. The Senate Environment and Public Works committee
is debating climate-change legislation this week,
Shares closed at $32.65 on Tuesday and weren't active premarket
Wednesday. They are down 12% this year.
-By Nathan Becker, Dow Jones Newswires; 212-416-2855;
nathan.becker@dowjones.com
(Christine Buurma contributed to this article.)
