Energy provider Southern Co. reported Thursday a 29.5 percent increase in first-quarter profit on a solid gain in sales.

The results, announced before the market opened, beat Wall Street expectations.

The Atlanta-based company said it earned $339 million, or 45 cents a share, in the three months ending March 31, compared to a profit of $262 million, or 35 cents a share, in the same period a year ago.

The company’s holdings include Alabama Power, Georgia Power, Gulf Power and Mississippi Power. Savannah Electric was merged into Georgia Power last year, according to a company spokesman.

Excluding the impact of the company’s synthetic fuel business, Southern Co. said it earned $311 million, or 41 cents a share, in the first quarter. Analysts surveyed by Thomson Financial were expecting earnings of 36 cents a share.

Revenue in the January-March quarter rose 11.3 percent to $3.41 billion, compared to $3.06 billion recorded a year ago.

Going forward, Southern Co. said its goal for earnings per share growth is to average 5 percent over the long-term, with annual growth within a range of 4 percent to 6 percent. Its full-year 2007 guidance calls for earnings per share of $2.13 to $2.18, excluding the impact of the synthetic fuel business, and $2.18 to $2.25, including synthetic fuel.

Southern acquires, builds and operates power production and delivery facilities.

One segment generates and sells electricity to retail and wholesale customers in the Southeast. The other segment provides telecommunications, energy products and services.

Southern Co. shares slipped 10 cents to $38.55 in morning trading on the New York Stock Exchange.