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SCANA Corp (SCG) to Report Q3 Earnings: What's in Store?
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SCANA Corporation is expected to report third-quarter 2016 earnings on Oct 27, before market opens.
In the last reported quarter, the company’s earnings of 74 cents per share came in above the Zacks Consensus Estimate of 73 cents and also improved from the year-ago earnings of 69 cents. SCANA’s earnings history is mixed, as it beat the Zacks Consensus Estimate in two of the trailing four quarters.
Let’s see how things are shaping up prior to the announcement.
SCANA is well positioned in a positive regulatory environment with a low risk business, outstanding customer growth and operational efficiency. These are favorable for stable cash flow generation and growth. We expect the company’s third-quarter results to be benefitted by these positives.
Another positive for shareholders is SCANA’s utility business mix. The majority of the company’s earnings come from regulated electricity and natural gas utilities business. SCANA’s nuclear expansion project is also 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 associated 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. These expenses will be partly reflected in the third quarter results as well.
Earnings Whispers
Our proven model does not conclusively show that SCANA will beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) 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 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate for the company stand at $1.05. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: SCANA carries a Zacks Rank #3. Though a favorable Zacks Rank increases the predictive power of ESP, but an Earnings ESP of 0.00% makes surprise prediction difficult.
Conversely, the Sell-rated stocks (Zacks Rank #4 and 5) should never be considered going into an earnings announcement.
Stocks to Consider
While an earnings beat looks uncertain for SCANA, here are some firms that you may want to consider on the basis of our model. These have the right combination of elements to post an earnings beat this quarter:
Spectra Energy Corp. (SE - Free Report) has an Earnings ESP of +12.50% and a Zacks Rank #3. The company is expected to release third-quarter earnings results on Nov 2.
Enterprise Products Partners LP (EPD - Free Report) has an Earnings ESP of +3.33% and a Zacks Rank #3. The company is expected to release earnings results on Oct 27.
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SCANA Corp (SCG) to Report Q3 Earnings: What's in Store?
SCANA Corporation is expected to report third-quarter 2016 earnings on Oct 27, before market opens.
In the last reported quarter, the company’s earnings of 74 cents per share came in above the Zacks Consensus Estimate of 73 cents and also improved from the year-ago earnings of 69 cents. SCANA’s earnings history is mixed, as it beat the Zacks Consensus Estimate in two 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 is well positioned in a positive regulatory environment with a low risk business, outstanding customer growth and operational efficiency. These are favorable for stable cash flow generation and growth. We expect the company’s third-quarter results to be benefitted by these positives.
Another positive for shareholders is SCANA’s utility business mix. The majority of the company’s earnings come from regulated electricity and natural gas utilities business. SCANA’s nuclear expansion project is also 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 associated 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. These expenses will be partly reflected in the third quarter results as well.
Earnings Whispers
Our proven model does not conclusively show that SCANA will beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) 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 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate for the company stand at $1.05. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: SCANA carries a Zacks Rank #3. Though a favorable Zacks Rank increases the predictive power of ESP, but an Earnings ESP of 0.00% makes surprise prediction difficult.
Conversely, the Sell-rated stocks (Zacks Rank #4 and 5) should never be considered going into an earnings announcement.
Stocks to Consider
While an earnings beat looks uncertain for SCANA, here are some firms that you may want to consider on the basis of our model. These have the right combination of elements to post an earnings beat this quarter:
Ensco plc , which is expected to release earnings results on Oct 27, has an Earnings ESP of +7.69% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Spectra Energy Corp. (SE - Free Report) has an Earnings ESP of +12.50% and a Zacks Rank #3. The company is expected to release third-quarter earnings results on Nov 2.
Enterprise Products Partners LP (EPD - Free Report) has an Earnings ESP of +3.33% and a Zacks Rank #3. The company is expected to release earnings results on Oct 27.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>