SCANA Reports Financial Results for First Quarter of 2017
Friday, April 28th, 2017
SCANA Corporation announced earnings for the first quarter of 2017 of $171 million, or earnings per share of $1.19, compared to $176 million, or earnings per share of $1.23, for the first quarter of 2016.
"Weather in the first quarter of this year was significantly milder than normal," said Jimmy Addison, Executive Vice President and Chief Financial Officer. "While this mild weather caused lower electric margins, gas margins were up due to rate increases and customer growth in our North and South Carolina businesses."
FINANCIAL RESULTS BY MAJOR LINES OF BUSINESS
South Carolina Electric & Gas Company
Reported earnings for the first quarter of 2017 at South Carolina Electric & Gas Company (SCE&G), SCANA's principal subsidiary, were $112 million, or earnings per share of 78 cents, compared to $116 million, or 81 cents per share, in the same quarter of 2016. Increased gas margins, due to a Rate Stabilization Act rate increase and customer growth, and higher electric margins primarily from a 2016 Base Load Review Act rate increase and customer growth, were more than offset by the impact of milder weather compared to the same period of the prior year. Abnormally mild winter weather decreased earnings by 24 cents per share in the first quarter of 2017, compared to a decrease of 5 cents per share in the first quarter of 2016. At March 31, 2017, SCE&G was serving approximately 713,000 electric customers and 361,000 natural gas customers, up 1.6 and 2.8 percent, respectively, over 2016.
PSNC Energy, the Company's North Carolina-based retail natural gas distribution subsidiary, reported first quarter 2017 earnings of $43 million, or 30 cents per share, compared to $36 million, or 25 cents per share in the same quarter of 2016. This increase is primarily attributable to higher gas margins from customer growth and a rate increase that became effective November 1, 2016. At March 31, 2017, PSNC Energy was serving approximately 552,000 customers, an increase of 2.6 percent over the previous year.
SCANA Energy Marketing
SCANA Energy Marketing, which markets natural gas in deregulated energy markets, including Georgia where the Company does business as SCANA Energy, reported first quarter 2017 earnings of $15 million, or 11 cents per share, compared to $24 million, or 17 cents per share, in the first quarter of 2016. This decrease is primarily due to lower gas margins attributable to lower sales volumes arising from significantly milder winter weather in 2017 than in 2016.
Corporate and Other, Net
SCANA's corporate and other businesses, which include the holding company, reported relatively flat earnings in the first quarter of 2017, consistent with the same quarter in 2016.
Based on 2016 GAAP earnings per share of $4.16, the Company estimates its targeted average annual earnings per share growth rate range to be 2 to 4 percent over the next 3 to 5 years due to incremental electric margins attributable to abnormal weather in 2016. Due to the significance of weather to SCE&G's earnings and its unpredictability, the Company is not able to provide 2017 GAAP earnings guidance.
For 2017, the Company reaffirms its guidance for 2017 GAAP-Adjusted Weather-Normalized earnings per share of $4.15 to $4.35, with an internal target of $4.25 per share.
In addition to the GAAP basis long-term growth rate guidance above, the Company estimates its targeted average annual growth rate for GAAP-Adjusted Weather-Normalized earnings per share to be 4 to 6 percent over the next 3 to 5 years based on 2016 GAAP-Adjusted Weather-Normalized earnings per share of $3.97. 2016 GAAP-Adjusted Weather-Normalized earnings per share reflect downward adjustments of 28 cents per share pre-tax and a tax effect of 9 cents per share for a net of tax 19 cents per share to normalize weather in the electric business.