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Is Disappointment in Store for SCANA (SCG) in Q2 Earnings?

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Electric utility SCANA Corporation (SCG - Free Report) is expected to report second-quarter 2017 earnings on Aug 3, before the market opens.

Last quarter, the company reported a negative earnings surprise of 13.14%. However, the average positive earnings surprise for the last four quarters was 1.87%. Let’s see how things are shaping up prior to the announcement.

Factors Likely to Influence this Quarter

SCANA Corp. is well positioned to benefit from a positive regulatory environment as it has a low risk business with outstanding customer growth and operational efficiency. These factors are favorable for stable cash flow generation and growth.

However, during the first quarter of 2017, the company’s cash balance decreased 94.2% while long-term debt has been on the rise since the beginning of 2014, reflecting huge costs related to nuclear projects. Hence, the company’s weak balance sheet is a lingering concern.  

Q2 Price Performance

Shares of SCANA have gained 2.6% during the quarter, significantly outperforming the industry’s 0.1% rise.

Earnings Whispers

Our proven model does not conclusively show an earnings beat for SCANA Corp. 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 -1.35%. This is because the Most Accurate estimate is at 73 cents, while the Zacks Consensus Estimate is higher at 74 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: SCANA Corp. carries a Zacks Rank #4 (Sell). Please note that the Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement. 

Stocks to Consider

Here are some firms that you may want to consider on the basis of our model. These have the right combination of elements to beat earnings this quarter.

Global Partners LP (GLP - Free Report) has an Earnings ESP of +60.00% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Chesapeake Energy Corporation (CHK - Free Report) has an Earnings ESP of + 7.14% and a Zacks Rank #3.

The Williams Companies Inc (WMB - Free Report) has an Earnings ESP of +21.05% and a Zacks Rank #3.

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