A pair of southeastern public utilities have bucked the sloppy market trend and checked in with generally solid third-quarter earnings.
The Southern standby
Atlanta-based Southern Company
It appears that Southern Company's earnings would have been higher but for a milder summer in its market area than a year ago, a sluggish economy, and the difficult financial markets that we all know so much about. Company CEO David Ratcliffe noted that, while his region is suffering the same stresses as other parts of the country, the effects on it have been less severe. Southern Company's primary areas of operations occur in Georgia, Florida, Alabama, and Mississippi.
And down to Gatorland
Slightly to the south of Southern Company's areas of activity, FPL Group
But given the less-than-stellar economic and credit conditions, FPL has announced plans to lower its capital expenditures for 2009 to $5.3 billion, from the previously planned $7 billion. Much of the reduction will include the deferral of new projects at FPL Energy, the company's "competitive energy subsidiary," much of whose efforts involve the development of wind energy.
It strikes me that certain public utilities have become more compelling amid the extreme market volatility of the past year. In addition to the two above, we'll receive results in the next days and weeks from the likes of Entergy
In the meantime, as I look at the two that have reported thus far, I'm especially inclined to suggest that my Foolish friends keep a close eye on Southern Company. It appears to have benefited from the general strength of its operating area, its solid margins, and a forward dividend yield that is tickling 5%. In the midst of our helter-skelter, loop-de-loop market conditions, it just may offer a welcome combination of current income and relative stability.
Southern Company and FPL Group have both received five-star ratings from Motley Fool CAPS members. Why not add your votes to each?
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