Scana Net Surges On Asset Sale But Weather Hurts
By Mary Ellen Lloyd
DOW JONES NEWSWIRES
CHARLOTTE -- Scana Corp.'s (SCG) second-quarter profits surged
85% as the South Carolina energy company recorded a gain related to the sale
of its stake in a telecommunications company. Meanwhile, mild weather and
higher wholesale natural gas prices damped earnings at the company's electric
utility and natural gas pipeline business.
Scana, Columbia, S.C., said net income rose to $74 million, or 67 cents a
share, from $40 million, or 38 cents a share.
Results in the most recent quarter included a gain of 33 cents a share from
proceeds related to West Corp.'s (WSTC) May acquisition of InterCall from
privately held ITC Holding Co. They also included an impairment charge of 4
cents a share related to its investment in Knology, another technology
company. In the year-ago quarter, results included a net gain of 2 cents a
share related to asset sales and impairment charges on investments.
Excluding unusual items, operating earnings rose 11% to $42 million, or 38
cents a share, from $38 million, or 36 cents a share, and were a penny below
the Thomson First Call consensus forecast.
Scana said mild weather hurt earnings by 4 cents a share at South Carolina
Electric & Gas Co., which posted a 2% increase in customers but saw kilowatt
sales of electricity decline nearly 2%. A retail rate increase that took
effect in February contributed 12 cents to earnings. Total earnings at the
unit rose 3% to $40 million.
Scana's N.C.-based retail natural gas distribution business, PSNC Energy,
posted a loss of 2 cents a share, unchanged from a year earlier.
Earnings at the company's regulated gas transmission business declined to a
penny a share from 3 cents a year earlier as high natural gas prices hurt
sales margins. The weather also hurt demand for natural gas used in electric
"Average temperatures across our electric
service territory during the second quarter, as measured by cooling degree
days, were 16% cooler than the second quarter of last year and 10% cooler than
normal," said Kevin Marsh, senior vice president and chief financial officer.
The company has a conference call scheduled for 10 a.m. EDT to discuss
The company also affirmed its previous outlook for 2003 operating earnings in
the range of $2.50 to $2.60 a share. Analysts polled by Thomson First Call
have a mean estimate of $2.54 a share. The estimate assumes normal weather for
the remainder of the year in Scana's service areas and excludes any potential
gains or losses from investing activities or asset sales.
Frank Jolley, who manages about $55 million for Jolley Asset Management in
Rocky Mount, N.C., said he wasn't concerned that Scana missed the consensus
estimate by a penny. "I think a lot of the utilities have had weaker results,"
Scana results weren't a big surprise, and
the stock remains a long-term core holding, Jolley said. But he's not adding
to his position at current share prices.
Scana shares, up 6% for the year, were up 0.3% at $32.75 Friday morning. They
hit a 52-week high of $35.45 on June 19.