Nov 2 (Reuters) - U.S. electric and gas utility Southern Co beat third-quarter profit estimates on Thursday, helped by higher power demand and lower operating expenses.

Shares of the company rose nearly 3% to $70.33 in afternoon trade.

A brutal heatwave that blanketed much of the U.S. during the quarter, with July being one of the hottest months on record, sparked a surge in electricity consumption as homes and businesses cranked up their air-conditioners.

Customer additions also helped Southern Co post a 2.1% rise in total retails sales at 42,364 kilowatt-hour during the quarter.

Its operating expenses fell about 21% to $4.87 billion in the three months ended Sept. 30, compared with a year earlier, primarily due to lower fuel costs.

Peers CMS Energy and Xcel Energy also posted a rise in their third-quarter profits.

On an adjusted basis, Southern Co posted a profit of $1.42 per share, topping average analysts' estimate of $1.32 per share, according to LSEG data.

Southern Co serves more than 9 million customers. Its electricity segment caters to the states of Alabama, Georgia and Mississippi. The gas segment provides services in the states of Illinois, Georgia, Virginia and Tennessee. (Reporting by Tanay Dhumal in Bengaluru; Editing by Shilpi Majumdar)