RGCO · RGC Resources, Inc.

RGC Resources, Inc. delivered strong Q2 fiscal 2026 results with net income of $8.7 million ($0.84 diluted EPS), a meaningful increase from $7.7 million ($0.74) in the year-ago quarter. The improvement stemmed from higher operating margins, bolstered by interim base rates effective January 1, 2026 under a pending rate case reviewed by the State Corporation Commission, though subject to potential refund. This was partially offset by elevated operating expenses and depreciation. Additional tailwinds included stronger equity earnings from the Mountain Valley Pipeline, LLC (MVP) investment—$904K vs $801K—and reduced interest expense to $1.6M from $1.6M prior year. CEO Paul Nester highlighted the system's reliability during Winter Storm Fern, with MVP performing as expected and benefiting Roanoke Valley customers, while noting ongoing inflationary pressures. Year-to-date, net income rose 5.3% to $13.6 million ($1.31 EPS) from $12.9 million ($1.26), supported by Q2 strength and lower half-year interest costs. Operating revenues surged 25% to $45.5 million, reflecting robust demand amid cold weather. Balance sheet remains solid with total assets at $337.1 million (up from $326.4 million), driven by utility property growth to $278.9 million, long-term debt at $128.9 million, and equity expansion to $124.1 million. The company raised its quarterly dividend to $0.2175 per share from $0.2075, signaling confidence in cash generation. No forward guidance was provided, but management emphasized rate case progress and infrastructure support amid inflation and customer growth risks.