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RGC Resources, Inc. Reports Second Quarter Earnings

1. RGCO reported Q2 earnings of $7.68 million, up from $6.44 million. 2. Earnings per share increased to $0.74 due to higher utility margins. 3. Operating revenues reached $36.46 million, a significant year-over-year growth. 4. Lower earnings from affiliates and high interest expenses impacted net income. 5. State Corporation Commission confirmed rate increases effective July 2024.

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Why Bullish?

The increase in earnings per share and revenue growth indicates strong operational performance, reminiscent of previous quarters where significant earnings results positively influenced stock price.

How important is it?

The article outlines key financial performance metrics that typically lead to investor confidence and potential stock price appreciation, especially in utility sectors where regulated rate adjustments are pivotal.

Why Short Term?

The immediate reaction to earnings reports can influence stock price in the following weeks, as seen with similar utilities that saw price spikes on positive earnings announcements.

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DUKEXCCMS
May 06, 2025 17:30 ET  | Source: RGC Resources Inc. ROANOKE, Va., May 06, 2025 (GLOBE NEWSWIRE) -- RGC Resources, Inc. (Nasdaq: RGCO) announced consolidated Company earnings of $7,676,208, or $0.74 per share, for the second quarter ended March 31, 2025, compared to $6,443,390, or $0.63 per share, for the second quarter ended March 31, 2024. The primary drivers of the increased earnings were higher base rates that went into effect July 1, 2024 and increased volumes, offset by lower earnings from unconsolidated affiliate and higher interest expense. Cooler winter weather and higher base rates drove higher margins and earnings. CEO Paul Nester stated, “We had a strong second quarter as utility margin increased 12%, enhanced by a colder January and by a large industrial customer who continued strong utilization compared to the same period a year ago. The Company’s earnings from its investment in the MVP, with the pipeline in operation, were $801,175 in the second quarter ended March 31, 2025, down from $1,229,384 in the second quarter ended March 31, 2024. The larger 2024 amount corresponded to the Company’s share of Allowance for Funds Used During Construction (AFUDC) during the construction phase.” Through the first six months of fiscal 2025, the Company’s net income of $12,945,897, or $1.26 per share, was up 12.9% from $11,463,382, or $1.14 per share, with similar reasons as the quarter – higher utility margin offset by lower earnings from the Company’s investment in MVP and higher interest expense. In early April, the State Corporation Commission issued a final order and made permanent the negotiated rates from the Company’s 2024 rate case filing. RGC Resources, Inc. provides energy and related products and services to customers in Virginia through its operating subsidiaries Roanoke Gas Company and RGC Midstream, LLC. Utility margin is a non-GAAP measure defined as utility revenues less cost of gas. Management considers this non-GAAP measure to provide useful information to both management and investors for purpose of such comparability and in evaluating operating performance, but it should be considered in addition to results prepared in accordance with GAAP and should not be considered a substitute for, or superior to, GAAP results. The statements in this release that are not historical facts constitute “forward-looking statements” made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. In order to comply with the terms of the safe harbor, the Company notes that a variety of factors could cause the Company’s actual results and experience to differ materially from any expectations expressed in the Company’s forward-looking statements, regarding inflation, interest rates, customer growth, infrastructure investment and margins. These risks and uncertainties include gas prices and supply, domestic and geopolitical considerations, along with risks included under Item 1-A in the Company’s fiscal 2024 Form 10-K. Forward-looking statements reflect the Company’s current expectations only as of the date they are made. The Company assumes no duty to update these statements should expectations change or actual results differ from current expectations except as required by applicable laws and regulations. Past performance is not necessarily a predictor of future results. Summary financial statements for the second quarter and fiscal year to date are as follows:  RGC Resources, Inc. and SubsidiariesCondensed Consolidated Statements of Income(Unaudited)           Three Months Ended Six Months Ended  March 31, March 31,   2025   2024   2025   2024          Operating revenues $36,462,097  $32,659,376  $63,751,583  $57,078,728 Operating expenses  26,062,155   24,029,667   46,023,620   41,796,982 Operating income  10,399,942   8,629,709   17,727,963   15,281,746 Equity in earnings of unconsolidated affiliate  801,175   1,229,384   1,655,388   2,697,219 Other income, net  463,633   89,487   936,969   210,273 Interest expense  1,630,275   1,566,613   3,410,205   3,202,886 Income before income taxes  10,034,475   8,381,967   16,910,115   14,986,352 Income tax expense  2,358,267   1,938,577   3,964,218   3,522,970          Net income $7,676,208  $6,443,390  $12,945,897  $11,463,382          Net earnings per share of common stock:        Basic $0.74  $0.63  $1.26  $1.14 Diluted $0.74  $0.63  $1.26  $1.13          Cash dividends per common share$0.2075  $0.2000  $0.4150  $0.4000          Weighted average number of common shares outstanding:      Basic  10,304,222   10,170,595   10,281,725   10,099,533 Diluted  10,308,368   10,174,006   10,285,939   10,102,284                   Condensed Consolidated Balance Sheets(Unaudited)             March 31, Assets    2025   2024   Current assets   $25,777,943  $28,525,645   Utility property, net    267,560,507   254,140,117   Other non-current assets    33,082,837   30,693,768            Total Assets   $326,421,287  $313,359,530            Liabilities and Stockholders' Equity       Current liabilities   $45,489,019  $21,702,382   Long-term debt, net    115,226,622   135,916,887   Deferred credits and other non-current liabilities   47,872,423   45,196,399   Total Liabilities    208,588,064   202,815,668   Stockholders' Equity    117,833,223   110,543,862            Total Liabilities and Stockholders' Equity  $326,421,287  $313,359,530    Contact:Timothy J. Mulvaney Vice President, Treasurer and CFOTelephone:(540) 777-3997

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