* Industrial sales pick up, residential weak
* Weather, rate hikes help drive profit
By Krishna Das
Oct 26 (Reuters) - U.S. power utilities reported higher quarterly profits on Wednesday, as a pickup in industrial activity and rate hikes helped sales overcome the drag of a weak economy.
American Electric Power , headquartered in Columbus, Ohio, expects to see an improvement in the economy.
“Industrial volume is up 5 percent for the quarter and year, based primarily on increased production by our metals customers and refiners,” said AEP Chief Executive Michael Morris.
“We see this as a positive sign for the economy as a whole.”
AEP’s third-quarter profit jumped, and the company narrowed its ongoing full-year earnings outlook to $3.07-$3.17 per share from $3.00-$3.20 per share.
AEP and Exelon Corp , the operator of the largest fleet of nuclear power plants in the United States, benefited from hotter-than-normal summertime weather in their service territories.
“Exelon Generation’s performance was exceptional, producing a nuclear fleet capacity factor of 95.8 percent and above normal output from our Texas plants to meet much higher demand due to hot weather,” CEO John Rowe said in a statement.
Exelon Generation is an operating company of Chicago-based Exelon, which said its results so far this year prompted it to reaffirm its full-year profit outlook.
The company, which is buying rival Constellation Energy , said its third-quarter adjusted profit rose 0.5 percent to $743 million.
Atlanta-based Southern Co , which covers the U.S. Southeast, saw its profit rise 12 percent, while revenue was up 2 percent.
Its third-quarter industrial electricity sales rose 1.6 percent, but residential sales fell 6.9 percent and commercial sales dipped 3.4 percent.
Southern cited “relatively cooler weather, primarily during the month of September,” for lower sales in some segments.
“The economic recovery in the Southeast is continuing, but at a slower pace than expected,” CEO Thomas Fanning said.
Earnings of smaller rival SCANA Corp rose about 4 percent to $105 million, primarily due to improved margins from electric base rate increases.
Chief Financial Officer Jimmy Addison pointed to the strength in industrial activity in its service territory and said 2011 was the best year for industrial announcements since before the recession.
The Cayce, South Carolina-based company serves about 665,000 electric customers in South Carolina and more than 1.2 million natural gas customers in South Carolina, North Carolina and Georgia.