SCANA Corporation is expected to report second-quarter 2016 earnings on Jul 28.
In the last reported quarter, the company’s earnings of $1.28 per share came below the Zacks Consensus Estimate of $1.39. Also, earnings decreased from the year-ago figure of $1.34. SCANA’s earnings history is mixed, as it beat the Zacks Consensus Estimate in two out of the trailing four quarters. Let’s see how things are shaping up prior to the announcement.
Factors Likely to Influence Earnings
SCANA’s nuclear expansion project is a catalyst to earnings growth. However the company’s high debt level and the overall business risk associated with the nuclear generation construction project is a major concern. The last nuclear generation construction cycle severely affected the stocks of numerous electric utilities. This fact results in a legitimate level of investor anxiety.
Moreover, SCANA’s capital program primarily includes two nuclear plants, which will cost it billions through 2018. Risks allied with financing the projects will be aggravated during the construction period as the company’s capital spending levels will rise. Execution risks latent in such large projects and regulatory uncertainties are other concerns. Further, the delay in commissioning SCANA’s first reactor by a year, to 2017, is likely to increase its capital expenses.
Overall activities of SCANA were inadequate to win analysts’ confidence. As a result, the Zacks Consensus Estimate for the second quarter fell to 73 cents from 74 cents per share over the last seven days.
Earnings Whispers
Our proven model does not conclusively show that SCANA Corp. is likely to beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here, as you will see below.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently pegged at -1.37%. The Most Accurate estimate for the company stands at 72 cents while the Zacks Consensus Estimate is pegged higher at 73 cents.
Zacks Rank: The company carries a Zacks Rank #4 (Sell). We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies from the energy space that, according to our model, have the right combination of elements to post an earnings beat:
Anadarko Petroleum Corporation has an Earnings ESP of +1.30% and a Zacks Rank #2. The company is likely to release earnings results on Jul 26.
Legacy Reserves LP has an Earnings ESP of +31.58% and a Zacks Rank #1. The partnership is expected to release earnings results on Aug 3.
Noble Energy Inc. has an Earnings ESP of +6.25% and a Zacks Rank #2. The company is expected to release earnings results on Aug 3.
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SCANA (SCG) to Report Q2 Earnings: Will Stock Disappoint?
SCANA Corporation is expected to report second-quarter 2016 earnings on Jul 28.
In the last reported quarter, the company’s earnings of $1.28 per share came below the Zacks Consensus Estimate of $1.39. Also, earnings decreased from the year-ago figure of $1.34. SCANA’s earnings history is mixed, as it beat the Zacks Consensus Estimate in two out of the trailing four quarters. Let’s see how things are shaping up prior to the announcement.
SCANA CORP Price and EPS Surprise
SCANA CORP Price and EPS Surprise | SCANA CORP Quote
Factors Likely to Influence Earnings
SCANA’s nuclear expansion project is a catalyst to earnings growth. However the company’s high debt level and the overall business risk associated with the nuclear generation construction project is a major concern. The last nuclear generation construction cycle severely affected the stocks of numerous electric utilities. This fact results in a legitimate level of investor anxiety.
Moreover, SCANA’s capital program primarily includes two nuclear plants, which will cost it billions through 2018. Risks allied with financing the projects will be aggravated during the construction period as the company’s capital spending levels will rise. Execution risks latent in such large projects and regulatory uncertainties are other concerns. Further, the delay in commissioning SCANA’s first reactor by a year, to 2017, is likely to increase its capital expenses.
Overall activities of SCANA were inadequate to win analysts’ confidence. As a result, the Zacks Consensus Estimate for the second quarter fell to 73 cents from 74 cents per share over the last seven days.
Earnings Whispers
Our proven model does not conclusively show that SCANA Corp. is likely to beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here, as you will see below.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently pegged at -1.37%. The Most Accurate estimate for the company stands at 72 cents while the Zacks Consensus Estimate is pegged higher at 73 cents.
Zacks Rank: The company carries a Zacks Rank #4 (Sell). We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies from the energy space that, according to our model, have the right combination of elements to post an earnings beat:
Anadarko Petroleum Corporation has an Earnings ESP of +1.30% and a Zacks Rank #2. The company is likely to release earnings results on Jul 26.
Legacy Reserves LP has an Earnings ESP of +31.58% and a Zacks Rank #1. The partnership is expected to release earnings results on Aug 3.
Noble Energy Inc. has an Earnings ESP of +6.25% and a Zacks Rank #2. The company is expected to release earnings results on Aug 3.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>