Electric utility Southern Co. (SO) reported Wednesday a profit for the first quarter that plunged from last year, hurt by a hefty charge related to Mississippi Power's Kemper County project. Stripping dow the charge, adjusted earnings per share for the quarter matched analysts' expectations, while quarterly revenues topped their estimates.
"In keeping with our commitment to customers, Southern Company will fully absorb the increased costs related to the Kemper project," Chairman, President and CEO Thomas Fanning said in a statement.
The Atlanta, Georgia-based company reported net income of $81 million or $0.09 per basic share for the first quarter, sharply lower than $368 million or $0.42 per basic share in the prior-year quarter.
Results for the latest quarter included a $0.38 per share charge related to an increased construction estimate for Mississippi Power's Kemper County project and a $0.02 per share charge related to the restructuring of a leveraged lease investment.
Excluding items, adjusted net income was $430 million or $0.49 per share, compared to $368 million or $0.42 per share in the year-ago quarter.
On average, 11 analysts polled by Thomson Reuters expected the company to report earnings of $0.49 per share for the first quarter. Analysts' estimates typically exclude special items.
Operating revenues for the quarter increase 8.1 percent to $3.90 billion from $3.60 billion in the same quarter last year, and topped five Wall Street analysts' consensus estimate of $3.75 billion.
Through its subsidiaries, Southern is engaged in the generation, transmission, distribution and sale of electricity in four Southeast states of Alabama, Georgia, Florida, and Mississippi.
Retail fuel revenues increased to $1.14 billion from $1.04 billion in the year-ago quarter, and retail non-fuel revenues grew to $2.16 billion from $2.06 billion in the year-ago quarter.
Revenues for wholesale totaled $432 million, higher that $349 million in the comparable quarter a year ago, and other electric revenues increased $155 million to $148 million from last year.
Total operating expenses rose to $3.57 billion from $2.84 billion last year, with fuel and purchased power expenses increasing to $1.36 billion from $1.21 billion a year ago.
In the first quarter, total energy sales to Southern's customers in the Southeast, including wholesale sales and retail, increased 4.9 percent to 43,570 Kilowatt-hours from last year's 41,524 Kilowatt-hours. Total wholesale kilowatt-hour sales grew 23.3 percent to 6,495.
Kilowatt-hour sales to retail customers in the company's four-state service areas increased 2.3 percent to 37,075 from last year, with residential electricity sales growing 8.3 percent, and commercial electricity sales increasing 1.2 percent, while industrial energy sales declined 2.1 percent.
"We continue to see positive signs of emerging economic growth in the Southeast, albeit at a slow pace. Activity in our economic development pipeline remains robust, and housing-related manufacturing segments are beginning to strengthen as well. These developments bode well for the recovery of our region and the future of our business," Fanning added.
In Wednesday's regular trading session, SO is currently trading at $48.12, down $0.53 or 1.10% on a volume of 2.90 million shares.
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