SCANA Falls Behind Consensus

SCANA Corporation (SCG: 34.55 -0.41 -1.17%) reported financial results for its fourth quarter of 2009. Earnings per share came in at 62 cents, compared to the Zacks Consensus Estimate of 63 cents and year-earlier earnings of 73 cents.

 

Estimate Revisions Trend

 

Amongst the 8 analysts covering the stock, no upward or downward movements in estimate revisions for the last 7 and 30 days have been noticed. Currently, the Zacks Consensus Estimate for full fiscal 2010 earnings is $2.96 per share, which would be a significant improvement over full fiscal 2009 earnings of $2.85.

 

The company’s earnings surprise for the preceding four quarters varies between 4.7% and 40.3%, with the average being 15.0%.

 

Operational Performance

 

SCANA clocked revenues of $1.1 billion in the reported quarter compared to $1.3 billion in the year-ago quarter. The downside trend was reflected in fiscal 2009 results, where revenue fell to $4.2 billion from $5.3 billion in the year-ago quarter. Results for the quarter were significantly affected by a weak economy that dragged down customer consumption. Although Electricity revenues increased, which partially offset the downside, Gas revenues (both regulated and non-regulated) fell.

 

In the reported quarter, SCANA’s principal subsidiary – South Carolina Electric & Gas Company − reported earnings of 39 cents per share compared to 46 cents in the year-ago quarter. The decrease was due to lower electric margins driven by reduced customer consumption, which more than offset lower operating and maintenance expenses, positive customer growth and rate increases.

 

In the reported quarter, PSNC Energy reported earnings of 17 cents per share, identical to the year-ago quarter. This was due to lower operating and maintenance expense and customer base growth.

 

SCANA Energy reported earnings of 7 cents per share, compared to 10 cents in the year-ago quarter. The decrease is attributable to more customers opting for fixed-rate plans, which more than offset lower operations and maintenance and bad debt expenses.

 

Carolina Gas Transmission Corporation reported earnings of 2 cents per share, compared to 1 cent in the year-ago quarter. The increase in earnings is due to lower operating and maintenance expenses and higher revenues as a result of an additional long-term contract.

 

Financial Condition & Outlook

 

At fiscal-end 2009, SCANA had approximately $4.5 billion compared to $4.4 billion at fiscal-end 2008. The company estimates its fiscal 2010 earnings per share to be in the range of $2.85 – $3.05. The 2010 guidance assumes normal weather in the company’s electric and natural gas service areas. The company continues to expect an average annual earnings growth rate of 4%−6% over the next 3 to 5 years.