Energy holding company, SCANA Corp. (SCG - Analyst Report) reported strong first-quarter results, driven by improved electric margins stemming from customer growth and rate increases, partially offset by higher expenses.
Earnings per share came in at $1.11, ahead of the Zacks Consensus Estimate of $1.03 and the previous year's 91 cents. The company’s total operating revenue increased 18.4% year over year to $1,311.0 million and was 10.3% above the Zacks Consensus Estimate.
South Carolina Electric & Gas Company (SCE&G): Earnings from this segment, which is also SCANA's principal subsidiary, were 68 cents per share, up 23.6% from the year-ago level of 55 cents per share. The segment experienced higher margins on the back of improved base rate and client base. To some extent, these factors were offset by higher expenses and share dilution.
As of Mar 31, 2013, natural gas and electric customers of SCE&G inched up 1.8% and 0.8% from the year-ago period to 325,000 and 673,000, respectively.
PSNC Energy: This segment achieved earnings of 24 cents per share during the quarter, flat from the year-ago period. Customer-fueled margin growth was canceled out by increase in operations, maintenance and depreciation expenses. At quarter end, PSNC Energy’s customer base increased 2.2% year over year to 500,000.
SCANA Energy-Georgia: The segment – housing SCANA’s retail natural gas marketing business in Georgia – reported a profit of 16 cents per share, up from the year-ago quarter level of 9 cents. This increase has been aided by the increase in throughput.
Corporate and Other, Net: The profit in this business segment remains the same as that in the first quarter of the previous year.
SCANA has reaffirmed preliminary estimates of its 2013 earnings of $3.25–$3.45 per share.
Stocks to Consider
SCANA currently carries a Zacks Rank #3 (Hold), implying that it is expected to be in line with the broader U.S. equity market over the next one to three months.
Meanwhile, one can look at electric utilities like Brookfield Infrastructure Partners LP (BIP - Snapshot Report) , Empresa Nacional de Electricidad SA and Huaneng Power International Inc (HNP - Snapshot Report) as attractive investments. All these firms sport a Zacks Rank #1 (Strong Buy).