Southern Company Reports Solid 2008 Earnings Despite Weak Economy, Mild Weather
ATLANTA - Southern Company today reported full-year 2008 earnings of $1.74 billion, or $2.26 a share, compared with earnings for 2007 of $1.73 billion, or $2.29 a share.
Southern Company also reported fourth quarter earnings of $185.6 million, or 24 cents a share, compared with earnings of $204.1 million, or 27 cents a share, in the fourth quarter of 2007.
Earnings for the fourth quarter and year ended Dec. 31, 2008, included charges of 2 cents a share and 11 cents a share, respectively, related to three leveraged leases from the 1990s when Southern Company pursued development of international energy projects. Earnings for the fourth quarter and year ended Dec. 31, 2007, included synthetic fuel earnings of 1 cent per share and 8 cents per share, respectively.
Excluding the impact of synthetic fuel investments and charges related to the leveraged leases, Southern Company earned $2.37 a share for the full-year 2008, compared with $2.21 a share for the same period in 2007. Excluding the impact of synthetic fuel investments and charges related to the leveraged leases, earnings for the fourth quarter of 2008 were 26 cents a share, compared with 26 cents a share for the same period in 2007.
For most of 2008, the Southeast experienced less of an economic downturn than the rest of the nation. The region is now experiencing the same economic stresses that have been plaguing the rest of the nation for some time, as evidenced in part by the continued decline in electricity sales and usage.
“Just as our customers are finding ways to manage through this economic recession, we are working to take the necessary steps to manage costs in our business and maintain the level of customer satisfaction and reliability our customers have come to expect,” said CEO David M. Ratcliffe. “While we expect these economic challenges to continue through 2009, we’re optimistic that the long-term viability of the region remains strong. We continue to execute our proven business strategy while preparing for the future growth of the Southeast,” Ratcliffe said.
Positive earnings drivers in 2008 include increased retail rates, revenues from market-response rates offered to commercial and industrial customers, and revenues associated with the recovery of investments in environmental equipment. These positive drivers were primarily offset by the weak economy, mild summer temperatures as compared with 2007, higher non-fuel operations and maintenance expenses, and asset depreciation primarily associated with increased investment in environmental equipment and transmission and distribution equipment. These investments are needed to produce cleaner energy and maintain reliability.
Revenues for the full year were $17.13 billion, compared with $15.35 billion in 2007, an 11.6 percent increase. Fourth quarter revenues were $3.80 billion, compared with $3.34 billion in the same period a year earlier, an increase of 13.8 percent.
Kilowatt-hour sales to retail customers in Southern Company’s four-state service area decreased 2.1 percent in 2008, compared with 2007. Residential energy sales decreased 2.0 percent. Commercial energy sales decreased 0.4 percent. Industrial energy sales declined 3.7 percent.
Total energy sales to Southern Company’s customers in the Southeast, including wholesale sales, decreased 0.8 percent in 2008 compared with 2007.
In conjunction with this earnings announcement, Southern Company has posted on its Web site detailed financial information on its fourth quarter and 2008 performance. These materials are available at www.southerncompany.com.
Southern Company’s financial analyst call will be at 1 p.m. Eastern time Jan. 28, at which time Ratcliffe and Chief Financial Officer Paul Bowers will discuss earnings and earnings guidance as well as a general business update. Investors, media and the public may listen to a live Webcast of the call at www.southerncompany.com. A replay of the Webcast will be available at the site for 12 months.
With 4.4 million customers and more than 42,000 megawatts of generating capacity, Atlanta-based Southern Company (NYSE: SO) is the premier energy company serving the Southeast. A leading U.S. producer of electricity, Southern Company owns electric utilities in four states and a growing competitive generation company, as well as fiber optics and wireless communications. Southern Company brands are known for excellent customer service, high reliability and retail electric prices that are significantly below the national average. Southern Company has been listed the top ranking U.S. electric service provider in customer satisfaction for nine consecutive years by the American Customer Satisfaction Index (ACSI). Visit our Web site at www.southerncompany.com.
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