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SCANA (SCG) Down 5.5% Since Earnings Report: Can It Rebound?

Zacks Equity Research
Updated

A month has gone by since the last earnings report for SCANA Corporation SCG. Shares have lost about 5.5% in that time frame.

Will the recent negative trend continue leading up to its next earnings release, or is SCG due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Recent Earnings

SCANA Corp.’s fourth-quarter 2017 earnings of $1.01 per share surpassed the Zacks Consensus Estimate of earnings of 98 cents. The bottom line also improved from the year-ago quarter’s figure of 87 cents.

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Quarterly operating revenues increased to $1,158 million, up from $1,057 million in the year-ago quarter.

Segment Performance

South Carolina Electric & Gas Company (SCE&G): Quarterly loss from this segment — SCANA’s principal subsidiary — was $3.16 against earnings of 65 cents in the year-ago quarter. Higher expenses primarily led to the decline.

As of Dec 31, 2017, SCE&G was serving about 368,000 natural gas customers, up 2.9% annually and 719,000 electric customers, up 1.3% annually.

PSNC Energy:This segment recorded profit of 20 cents during the fourth quarter compared with 19 cents in the prior-year quarter. The upside was driven by customer growth and improved gas margin.

SCANA Energy-Georgia: The segment — comprising SCANA’s retail natural gas marketing business in Georgia — posted earnings of 7 cents, up 40% from 5 cents in the fourth quarter of 2016. The improvement can be attributed to increased gas margins.

Corporate and Other, Net: This business segment posted loss of 22 cents, wider than the loss of 2 cents in the year-ago quarter.

Expenses

During the fourth quarter, the company reported $1,766 million in operating expenses compared with $804 million in the prior-year quarter.

How Have Estimates Been Moving Since Then?

Fresh estimates followed an upward path over the past two months.

SCANA Corporation Price and Consensus

 

SCANA Corporation Price and Consensus | SCANA Corporation Quote

VGM Scores

At this time, SCG has a great Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Based on our scores, the stock is equally suitable for growth and momentum investors while value investors may want to look elsewhere.

Outlook

SCG has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.


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Zacks Investment Research