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What SCANA Investors Should Do amid Mounting Challenges

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What SCANA Investors Should Do amid Mounting Challenges PART 1 OF 5

SCANA Stock Continues Free Fall, Trades Near Its Six-Year Low

SCANA stock fell 6%

Hostile developments continued to weigh on SCANA (SCG) stock recently in the aftermath of its abandoned nuclear power plant. SCG fell 6%, which is almost its six-year low, after CEO (chief executive officer) Kevin Marsh stepped down on October 31, 2017.

Bloomberg reported that Marsh’s resignation came a day after South Carolina lawmakers called him to resign. Jimmy Addison, SCANA’s CFO (chief financial officer), will take over Marsh’s job starting January 1, 2018.

SCANA Stock Continues Free Fall, Trades Near Its Six-Year Low

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SCANA is now facing a state and federal investigation regarding the rate recovery of its V.C. Summer nuclear power plant. SCANA abandoned the construction of this nuclear project in July 2017. The project’s cost exceeded $20 billion after Westinghouse’s bankruptcy.

3Q17 earnings

SCANA reported its 3Q17 financial results on October 26. Its profits fell a huge 82% YoY (year-over-year). SCANA reported an impairment loss of $210 million associated with its nuclear power plant.

For 3Q17, SCANA reported total revenues of $1.07 billion, compared with$1.09 billion in 3Q16. Revenues were positively impacted by a customer base expansion of 1.3% YoY in electric and 2.9% YoY in the gas segment. Total retail sales fell 2.8% YoY in 3Q17.

SCANA maintained its 2017 GAAP (generally accepted accounting principles) adjusted, weather-normalized earnings guidance range of $4.15–$4.35 per share.

SCANA investors baffled

SCANA stock has underperformed peers, falling more than 42% YTD (year-to-date), compared with the Utilities Select Sector SPDR ETF’s (XLU) 14% YTD gain.

But SCANA stock is seeing a notable volume surge from the past few months. On October 31, 2017, more than 4.0 million shares exchanged hands, compared with its 3-month average volume of 2.0 million.

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