ATLANTA (AP) — Cost overruns at a plant under construction in Mississippi pulled down first-quarter profit for Southern Co., the Atlanta-based electric utility said Wednesday.
The company earned $81 million, or 9 cents per share, for the first three months of the year. That compares with earnings of $368 million, or 42 cents per share, in the first quarter of 2012.
Southern Co. said the results include two major charges against its earnings.
The largest was a $333 million after-tax charge related to increased construction costs for a project in Mississippi. The price tag on the plant, being built in Kemper County, has risen to about $3.42 billion from $2.88 billion, due to labor costs, piping and other material expenses, engineering and support costs and productivity decreases.
The plant will take lignite, a form of soft coal, crush it and turn it into a gas before burning it to generate electricity. It will use technology designed to strip out carbon dioxide and other hazardous gases from the gasified lignite.
Southern Co. also recorded a charge of $16 million tied to the restructuring of a leveraged lease investment during the quarter.
Excluding these items, the utility said its adjusted earnings came to 49 cents per share for the period.
Total revenue reached $3.9 billion for the period, up more than 8 percent from the $3.6 billion last year.
Analysts, on average, were expecting earnings of 50 cents per share for the period on revenue of $3.78 billion.
"We continue to see positive signs of emerging economic growth in the Southeast, albeit at a slow pace," Thomas Fanning, Southern Co.'s chairman, president and CEO said in a statement. "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."
Southern Co. has 4.4 million customers and owns electric utilities in four states. Its stock fell 63 cents to $48.02 by early afternoon.
Copyright 2013 The Associated Press.