HOUSTON, Jan 24 — Southern Co. shares rose Thursday after senior executives predicted the Atlanta-based integrated energy producer’s earnings would be up 9¢/share in 2002 over 2001.

The company reported 2001 net income of $1.12 billion, or $1.62/share, up from $994 million, or $1.52/share in 2000. Chief Financial Officer Gale Klappa said competitive generation contributed 5¢/share to earnings in 2001.The company expects to earn $1.71/share this year, a penny more than the consensus estimate of analysts polled by Thomas Financial/First Call.

Southern’s shares rose 1.17% to $25.06 in mid-afternoon trading on the New York Stock Exchange.

Revenues for 2001 were $10.2 billion, compared with $10.1 billion in 2000. Fourth quarter revenues totaled $2.2 billion, compared with $2.3 billion in the same period a year earlier.

For the 2001 fourth quarter, Southern reported net income of $116 million, or 16¢/share, up from $64 million, or 9¢/share, in the 2000 fourth quarter. Klappa said cost controls, lower interest expense, and customer growth offset unseasonably mild winter weather, a slowdown in industrial demand, and earnings dilution from a stock sale.

Klappa told financial analysts Southern does not expect any more equity offerings this year or next and is on track to raise equity to 38% by 2003. He said the company expects to spend $9.5 billion between now and 2005 on transmission, environmental upgrades, and merchant generation plants.

CEO Allen Franklin said about 1,700 Mw of unregulated generation will come on line this year. But he emphasized Southern doesn’t build plants without first having contracts in place for the output, nor is it exposed to the spark spread. “We don’t take the fuel risk,” Klappa added.

CEO Allen Franklin said the Southern is considering entering Georgia’s retail gas market because “deregulation did not go well,” especially with respect to billing. The Georgia Legislature is working to create a regulated backstop as a fix for the problem.

“We have drafted legislation for the Assembly to consider as a stalking horse,” Franklin said. He described the possibility of serving some retail gas customers as “not a huge deal” to Southern but one with “some long-term strategic value.” A decision is expected by summer.

Franklin also told analysts Southern is making progress on its regional transportation organization with federal regulators, especially since Entergy Corp., New Orleans, La., signed on. Pricing is under discussion with the Federal Energy Regulatory Commission, he said.

Responding to a question, Franklin said Southern has yet to experience a pick up in demand by industrial customers. Industrial energy use declined 6.8% to 52.9 billion kw-hr last year. “We have a huge industrial base,” he said. “Very little if anything seems to be rebounding, but it does seem to be settling down.”

Total sales of electricity to Southern’s customers in the Southeast, including sales to other utilities, decreased 0.5% to 176 billion kw-hr in 2001. In-home electricity needs were down 3.6% to 44.5 billion kw-hr. Electricity use by commercial customers — offices, stores, and other nonmanufacturing firms — increased 1.5% to 46.9 billion kw-hr.