Dive Brief:
- Southern Company's reported $852 million in Q3 earnings, down 13% from $979 million a year ago. Southern has earned $1.23 billion through the first three quarters of 2013, down from $1.97 billion a year ago.
- CEO Tom Fanning blamed the results on "consistently unseasonable weather," decreasing retail electricity sales and costs incurred on Vogtle and Kemper power plant projects.
Dive Insight:
Despite the results, Fanning remained optimistic: "I think Southern is going to be fine in the long run; its just getting through Kemper is the issue." Fanning expects company growth to pick up in the early 2020s, which is when "the next timeframe of new generation will be."
In terms of M&A deals, CEO Tom Fanning noted "there is a lot for sale" but "it's just kind of junk in my view." Southern "[doesn't] believe in the merchant model" as it "doesn't serve customer's interest in the long run," Fanning said. "The lack of selling and buying projects of Southern Power is not because they aren’t out there, [but] because we don’t like what we see."
Coal plants, in particular, are being sold for cents on the dollar in the U.S. right now as the EPA seeks to phase out fossil fuels. Solar power, however, does intrigue Southern to some degree, with Fanning noting "we just don't how much more solar is out there" and "what our appetite is."