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Wednesday's Energy Stocks: Southern Co. declines 4.48% on $1.1B pretax loss


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Wednesday's Energy Stocks: Southern Co. declines 4.48% on $1.1B pretax loss

Broader markets closed lower on Wednesday, Aug. 8, after China announced 25% retaliatory tariffs on $16 billion of U.S. goods, effective Aug. 23. The Dow Jones Industrial Average settled down 0.18% to 25,583.75, and the S&P 500 dipped 0.03% to 2,857.70.

Among electric utilities, Southern Co. shares declined 4.48% on strong volume to close at $46.88, after the company announced a $1.1 billion pretax charge to income, which represents utility subsidiary Georgia Power Co.'s increased share of the projected cost to complete two new reactors at the Vogtle nuclear plant. Management said the pretax loss is a bitter but necessary pill to swallow in order to keep up momentum at the over-budget, behind-schedule expansion project.

For the second quarter, Southern Co. announced net income, excluding items, of $815.0 million, or 80 cents per basic share, improving from $728.0 million, or 73 cents per basic share, a year earlier.

SCANA Corp. retreated 3.22% on light volume to end at $38.73. Its subsidiary South Carolina Electric & Gas Co. announced that it will appeal a federal court decision denying the utility's request to stop the implementation a temporary rate reduction tied to cost recovery of its cancelled V.C. Summer nuclear plant expansion.

The S&P 500 Utilities Sector lost 0.54% to 268.35.

Tesla Inc. shed 2.43% in brisk trading to finish at $370.34, following the announcement that the company's board has begun discussions with CEO Elon Musk about taking the company private.

Vivint Solar Inc. was down 3.60% on strong volume to $5.35, after recording a second-quarter non-GAAP net loss of $58.7 million, or negative 50 cents per share, compared to a net loss of $37.1 million, or negative 33 cents per share, a year ago. Vivint Solar has raised $327 million in total funding commitments after securing a multiparty forward flow funding arrangement.

Geothermal energy developer Ormat Technologies Inc. finished 4.94% lower in active trading to close at $49.67, after reporting adjusted EBITDA of $80.8 million in the second quarter of 2018, an 8.3% drop from $88.1 million a year ago. The company revised its full-year guidance to reflect the shutdown of the 38-MW Puna Geothermal Venture I plant in Hawaii, which has been damaged by lava from the Kilauea volcano.

Following the release of its second-quarter financial results, Cimarex Energy Co. dropped 8.62% to finish at $88.95. Cimarex Energy booked $151.9 million, or $1.59 per share, in adjusted net income for the second quarter, compared to $101.0 million, or $1.06 per share, a year earlier. The result missed estimates of $1.64 per share for the second quarter of 2018.

Meanwhile, Continental Resources Inc. rose 1.77% on brisk volume to finish at $63.31. The company recorded $272.9 million, or 73 cents per share, in adjusted net income, compared to a loss of $1.8 million, or zero cents per share, in the second quarter a year ago.

LINN Energy Inc. shares nosedived 52.77% after robust trading on the OTC market to close the day at $18.90. The company reported that its adjusted net income before interest expense, income taxes, depletion, depreciation amortization and exploration expenses for the second quarter plunged 90% on the year to $11 million. LINN Energy has also completed its spinoff of Riviera Resources Inc., separating its midstream and certain upstream units.

Plains All American Pipeline LP rose 6.75% on heavy volume to end at $26.74, a trading day after it posted second-quarter adjusted EBITDA of $506 million, an increase from $451 million a year earlier. The partnership is planning faster a in-service date for its pipelines in Texas as shipper demand soars for transportation in the Permian and Delaware Basins.

The S&P 500 Energy Sector lost 0.76% to 557.65, while the Alerian MLP Index ticked up 1.06% to 288.26.

In the coal sector, shares of Hallador Energy Co. decreased 3.76% to $6.65, after posting a second-quarter net loss of $23,000, compared with earnings of $389,000, or 1 cent per share, during the year-ago quarter. The company expects a strong second half in 2018, with higher coal sales volumes at a greater price.

Market prices and index values are current as of the time of publication and are subject to change.