Scana (SCG) Down 10.9% Since Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Scana Corporation SCG. Shares have lost about 10.9% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Third-Quarter 2017 Results
SCANA’s third-quarter 2017 earnings of 24 cents per share missed the Zacks Consensus Estimate of $1.17, down from the year-ago figure of $1.32. The decline can be attributed to higher expenses relating to the abandonment of a new nuclear project.
The company’s quarterly operating revenues decreased to $1,073 million from $1,093 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 29 cents per share, down from $1.43 in the year-ago quarter. Higher expenses primarily led to this decline.
As of Sep 30, SCE&G was serving about 362,000 natural gas customers, up 2.9% annually and 717,000 electric customers, up 1.3% annually.
PSNC Energy: This segment incurred a loss of 1 cent during the quarter, narrower than a loss of 5 cents in the prior-year quarter. The upside was driven by customer growth and improved gas margin.
SCANA Energy: The segment — comprising SCANA’s Georgia-based retail natural gas marketing business — posted a recorded profit of 1 cent. It incurred a loss of 1 cent in third-quarter 2016. This was attributable to lower bad debt and reduced expenses on account of lower-activity level.
Corporate and Other, Net: This business segment reported a loss of 5 cents per share and remained flat on a year-over-year basis.
Expenses
During the third quarter, the company reported operating expenses of $956 million compared with $745 million in the prior-year quarter.
Guidance
SCANA reaffirmed its 2017 GAAP-adjusted weather-normalized earnings guidance in the range of $4.15-$4.35 per share.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last month as none of them issued any earnings estimate revisions.
VGM Scores
Currently, Scana's stock has an average Growth Score of C, however its Momentum is doing a lot better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. 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 value and momentum investors.
Outlook
The stock has a Zacks Rank #5 (Strong Sell). We expect below average returns from the stock in the next few months.
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