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SCANA Stock Declines amid Deal Uncertainty

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D and SCG: Deal or no deal?

South Carolina–based SCANA Corporation (SCG) stock fell more than 3.0% on April 19 after its deal with Dominion Energy (D) hit another setback. SCANA has lost more than 45.0% after it abandoned a half-constructed nuclear power project last year. Dominion Energy, the third-largest utility by market capitalization, announced its agreement to buy SCANA for $7.9 billion early this year.

The South Carolina State Senate passed a bill to reduce the money SCANA can collect from the ratepayers for a now-abandoned nuclear power project. This bill would eliminate the benefits of the proposed merger, according to Dominion Energy. Dominion Energy is threatening to call off the deal if it’s disallowed from recovering nuclear project costs from ratepayers.

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According to a study released on April 17, 2018, Dominion Energy’s ongoing merger with SCANA could boost South Carolina’s economic output by more than $18.7 billion. The study was conducted by the state’s economists and was released by Dominion on its website. The study states that lower power rates and refunds offered by Dominion would ultimately increase the state’s economic output.

Earnings

SCANA Corporation is set to report its 1Q18 financial results on April 26, 2018. According to analysts, SCANA is estimated to report earnings per share (or EPS) of $1.11 against its EPS of $1.19 in 1Q17. It’s expected to report total revenues of $1.24 billion in 1Q18, up from its revenues of $1.17 billion in 1Q17.

SCANA’s customer base growth has been extraordinary in the last few quarters, and it’s expected to stay around 2.0% in 2018 relative to last year. SCANA’s management anticipates flattish weather-adjusted electric sales growth this year.

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