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SCANA (SCG) Misses Q4 Earnings Estimates on Higher Expenses

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Energy holding company SCANA Corp. 's SCG fourth-quarter 2016 earnings of 87 cents per share missed the Zacks Consensus Estimate of 93 cents due to higher operating expenses. The bottom line, however, improved from the year-ago comparable quarter figure of 69 cents per share owing to higher electric and gas margins as well as growth in customer base.

The company's quarterly operating revenues increased to $1,057 million from $956 million in the year-ago period.

Segment Performance

South Carolina Electric & Gas Company (SCE&G): Quarterly earnings from this segment - SCANA's principal subsidiary - were 65 cents per share, up 25% from 52 cents in the year-ago quarter. Higher electric margin, favorable weather conditions as well as growth in customer base led to the improvement.

PSNC Energy: This segment recorded profit of 19 cents per share during the fourth quarter compared with 17 cents reported 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 5 cents per share. The segment had reported earnings of 2 cents per share in the fourth quarter of 2015. This improvement is attributable to increased gas margins.

Corporate and Other, Net: This business segment posted loss of 2 cents per share. The reported figure remained unchanged from the year-ago quarter.

Expenses

During the fourth quarter, the company reported $804 million in operating expenses as against $742 million in the prior-year quarter.

Guidance

SCANA projected 2017 earnings guidance in the range of $4.15-$4.35 per share. The company continues to expect an average annual growth rate in the range of 4-6% over the next three to five years.

Share Price Movement

In the last three months the company's shares underperformed the Zacks categorized Utility-Electric Power industry. During the aforesaid period, SCANA's shares lost 3.4% compared with 6.6% gain by the industry.

Zacks Rank

Currently, SCANA sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Other well-ranked stocks in the energy sector include Ultra Petroleum Corp. UPLMQ , Denbury Resources Inc. DNR and W&T Offshore Inc. WTI . Ultra Petroleum sports a Zacks Rank #1 while both Denbury and W&T Offshore carry a Zacks Rank #2 (Buy).

Ultra Petroleum is expected to report revenue growth of 57.7% in 2017.

Denbury Resources is likely to report year-over-year growth of almost 15% and 447% on its revenues and earnings in 2017.

W&T Offshore reported a positive earnings surprise in each of the last four quarters with an average beat of 31.49%.

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Scana Corporation (SCG): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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