For the six months ended June 30, Southern Company's earnings were $604.3 million

 - By Linton Levy -

Southern Company has reported second quarter earnings of $478.6 million, or 61 cents a share, compared with $416.4 million for the second quarter of 2008, or 54 cents a share, in the same period a year ago.

For the six months ended June 30, Southern Company's earnings were $604.3 million, or 77 cents a share, compared with $775.6 million, or $1.01 a share, for the same period a year ago.

Earnings for the six months ended June 30, 2009, included a charge of 26 cents a share related to a settlement agreement with MC Asset Recovery (MCAR) LLC to resolve a lawsuit arising out of the 2003 bankruptcy of Mirant Corp., a Southern Company subsidiary until its 2001 spin-off. Earnings for the quarter and six months ended June 30, 2008, included a charge of 9 cents per share related to tax issues on three leveraged-lease investments from the 1990s, when Southern Company pursued development of international energy projects.

Southern Company earned 61 cents a share in the second quarter of 2009, compared with 63 cents a share for the second quarter of 2008, excluding the impact of the leveraged-lease charge. Southern Company earned $1.03 a share for the first six months of 2009, compared with $1.10 a share for the same period in 2008, excluding the impact of the leveraged-lease charge and the MCAR settlement.

Revenues for the second quarter were $3.89 billion, compared with $4.22 billion in the same period a year ago, a 7.8 percent decrease. For the first six months of the year, revenues totaled $7.55 billion, compared with $7.90 billion in the same period a year ago, a 4.4 percent decrease.

The economy continued to have a negative impact on earnings in the second quarter, as evidenced by a decrease in electricity sales. Industrial sales sustained the greatest impact, dropping 17.6 percent in the second quarter, compared with the second quarter last year. Other negative drivers included decreased industrial base revenues.

"It is clear that as this challenging economy continues, our revenue erosion is significant, particularly among our industrial and manufacturing customers," said Southern Company Chairman, President and CEO David M. Ratcliffe. "However, our employees remain focused on executing the fundamentals of our business that will serve our customers and our shareholders in the long term."

Positive earnings drivers for the second quarter included lower operations and maintenance expenses, increased monthly service charges, revenues associated with the recovery of investments in environmental equipment, and a gain as a result of the early termination of two international leveraged-lease investments.

According to the Federal Reserve Bank of Atlanta, the economy in the Southeast appears to have stabilized. Southern Company's industrial sales reflect this trend, having leveled off over the past eight months and more recently showing marginal signs of improvement. Indications are that the economy is nearing a bottom and a slow recovery is expected to begin next year.

Economists maintain that the Southeast has advantages when compared with the national economy. Mild weather and the cost of living and doing business in the Southeast, which is more affordable than other regions of the country, continue to attract people to the region.

In the second quarter, kilowatt-hour sales to retail customers in Southern Company's four-state service area decreased 6.5 percent compared with sales in the second quarter of 2008. Residential electricity sales decreased 0.9 percent. Electricity sales to commercial customers decreased 0.6 percent, and industrial sales decreased 17.6 percent. Year-to-date, kilowatt-hour sales to retail customers decreased 6.5 percent compared with sales during the same period in 2008. Residential electricity sales decreased 1.1 percent. Commercial sales decreased 0.9 percent and industrial sales declined 17.3 percent.

Total energy sales to Southern Company's customers in the Southeast, including wholesale sales, decreased 8.0 percent in the second quarter of 2009 compared with the same period of 2008. Year-to-date, total sales of electricity decreased 8.4 percent as compared with the same period in 2008.

Southern Company's financial analysts call will be at 1 p.m. EDT July 29, 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 http://investor.southerncompany.com/events.cfm. 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 below the national average. Southern Company is consistently listed among the top U.S. electric service providers in customer satisfaction by the American Customer Satisfaction Index (ACSI). Visit our Web site at www.southerncompany.com.