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SCANA (SCG) Misses on Q1 Earnings, Revenues Decline Y/Y

Energy holding company SCANA Corp. SCG reported first-quarter 2016 earnings of $1.28 per share that missed the Zacks Consensus Estimate of $1.39 and deteriorated from the year-ago figure of $1.34. In the reported period, performance was affected by a milder winter.
 

The company’s quarterly operating revenues decreased to $1,172 million from $1,389 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 86 cents per share, up from 84 cents in the year-ago quarter.

PSNC Energy: This segment recorded earnings per share of 25 cents during the first quarter versus 24 cents in the prior-year quarter.

SCANA Energy-Georgia: The segment – comprising SCANA’s retail natural gas marketing business in Georgia – posted earnings of 17 cents per share, lower than 23 cents in the first quarter of 2015.

Guidance

SCANA reaffirmed its 2016 earnings guidance of $3.90–$4.10 per share. The company targets an average annual growth rate of 4–6% over the next three to five years.

Our Expectation

Going forward, we expect SCANA to benefit from the new electricity generation plants within its service territory and nuclear expansion projects. The company is a stable, relatively strong and regulated integrated electric utility, supported by favorable regional demographics and electric utility rate.

However, we are apprehensive of the company’s sensitivity to changes in coal, gas, oil and other commodity prices. Construction costs and delays could affect the timing of rate base growth, earnings, cash flow and balance sheet quality.

Currently, SCANA carries a Zacks Rank #3 (Hold). Some better-ranked players from the broader energy sector are SunCoke Energy Inc. SXC, PetroChina Co. Ltd. PTR and Braskem S.A. BAK. Each of these stocks sports a Zacks Rank #1 (Strong Buy).

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SCANA CORP (SCG): Free Stock Analysis Report
 
PETROCHINA ADR (PTR): Free Stock Analysis Report
 
BRASKEM SA (BAK): Free Stock Analysis Report
 
SUNCOKE ENERGY (SXC): Free Stock Analysis Report
 
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