SCANA Beats Zacks Estimate

SCANA Corporation (SCG - Analyst Report) reported financial results for its third quarter of 2009. Earnings per share came in at 84 cents, compared to the Zacks Consensus Estimate of 77 cents and year-earlier earnings of 80 cents.
 
Results for the quarter were significantly benefited by the resolution of a state tax issue, partially offset by lower electric and natural gas margins and higher operating expenses. Total operating revenues decreased more than 27% year over year to $921 million. 

The company’s attractive - and in our view, secure - dividend (annualized rate of $1.88 per share), currently yielding in 5.4%, compares favorably with other income streams, including the Treasury yield. 

South Carolina Electric & Gas Company (SCE&G) reported earnings of 89 cents per share, compared to 85 cents in the year-earlier quarter. The increase in earnings were mainly driven by the benefit from state tax related issue and partially offset by lower electric margins and share dilution. In PSNC Energy, the company recorded a loss of 4 cents per share in both the comparable quarters. 

Earnings in Carolina Gas Transmission (CGT) came in at 3 cents per share in the reported quarter, compared to 2 cents per share in the year-earlier quarter. The segment continues to deliver consistent earnings driven by its transportation-only business model. 

The company’s Energy segment reported a loss of 2 cents per share, compared to breakeven results in the year-ago quarter. The decline reflected lower margins on the back of increased customer preference for fixed-rate plans. 

SCANA’s Corporate and Other businesses (including SCANA Communications, ServiceCare, SCANA Energy Marketing and the holding company) recorded a loss of 2 cents per share against a loss of 3 cents per share in the year-ago quarter. 

At the end of the quarter, the company had approximately $4.2 billion in long-term debt, representing a debt-to-capitalization ratio of 54.6%. SCANA has updated its 2009 earnings guidance range to $2.80-$2.95 per share from the previous guidance range of $2.65-$2.95 per share. The 2009 guidance assumes normal weather in the company's electric and natural gas service areas for the remainder of the year and excludes any potential impact from changes in accounting principles and gains or losses from certain investing activities, litigation and sale of assets. The company continues to expect an average annual earnings growth rate of 4%-6% over the next 3 to 5 years.