SCANA (SCG) to Report Q2 Earnings: What’s in the Cards?

SCANA Corporation SCG is scheduled to report second-quarter 2018 results on Aug 2, before the opening bell.

In the last reported quarter, the company delivered a negative earnings surprise of 18.1%. Moreover, SCANA beat the Zacks Consensus Estimate in two of the last four quarters, the average negative surprise being 0.3%.

Which Way Are Estimates Treading?

Let’s take a look at the estimate revision trend to get a clear picture of what analysts feel about the upcoming earnings release.

The Zacks Consensus Estimate for second-quarter earnings of 59 cents has been stable in the last seven days. The estimate reflects year-over-year decline of 30.6%.

Factors Likely to Influence Q2 Earnings

Recently, SCANA signed a merger deal with larger peer Dominion Energy Inc, which has raised customer’s optimism. Upon the closure of the deal, Dominion Energy is expected to make a payment of $1.3 billion to the customers of SCANA. Hence, on average, each client of SCANA is likely to receive $1000. Additionally, the company has decided to lower customer bills by 5%. Moreover, Dominion Energy decided to not ask customers to pay $1.7-billion capital related to the failed nuclear project. This will enhance shareholders’ value and the positives from this merger are likely to be reflected in the upcoming quarterly results.

The company’s balance sheet looks dismal, with cash and cash equivalents totaling $199 million compared with debt of around $6 billion. The downside was caused by the company’s decision to cease construction of units 2 and 3 at the VC Summer Nuclear Station.

Earnings Whispers

Our proven model does not show that SCANA will beat estimates this quarter. That is because a stock needs to have 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.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: SCANA carries a Zacks Rank #3. Please note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Q2 Price Performance

During the quarter, SCANA has outperformed the industry. The company’s shares gained 2.6% compared with the industry’s 0.3% increase.

Stocks to Consider

Here are a few companies, which per our model, have the right combination of elements to post an earnings beat this quarter:

Cheniere Energy, Inc. LNG, based in Houston, TX, is engaged in businesses related to liquefied natural gas. The company has an Earnings ESP of +5.25% and holds a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Delek Logistics Partners L.P. DKL owns, operates, purchases and constructs crude oil and refined products logistics as well as marketing assets. The partnership has an Earnings ESP of +0.63% and a Zacks Rank #2.

Occidental Petroleum Corp. OXY is an international oil and gas exploration and production company. The company has an Earnings ESP of +1.75% and carries a Zacks Rank #2.

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