Thursday, February 11, 2010
Parent of Roanoke Gas sees profit dip
RGC Resources said a warmer-than-normal October and November contributed to the drop.
The latest from The Ticker blog
Profits slipped by about 6 percent during the first quarter for RGC Resources, parent company of Roanoke Gas, when compared with the first quarter of 2008.
John Williamson, RGC's chairman, president and chief executive officer, attributed the modest decline to a combination of reduced earnings for the quarter by subsidiaries, warmer-than-normal temperatures in October and November and reduced consumption of natural gas by industrial customers affected by the recession.
The company's first quarter ended Dec. 31.
First-quarter earnings totaled about $1.8 million, or 82 cents per share, compared with 88 cents per share during the same period last year.
Year-end earnings were up, totaling about $4.7 million, or $2.13 per share, compared with $2.10 per share for the 12 months ended Dec. 31, 2008.
Williamson said temperatures in October and November were 3 percent warmer than the historical average. He said December's cold weather and related revenues are reflected, in part through estimates, in the earnings.
But he said most Roanoke Gas customers have not experienced sharp spikes in their bills for December and January because natural gas prices have been down. The related billing rate has dropped by about 25 percent to 30 percent, he said.
"For the most part, we've seen the effects of increased usage during the cold weather offset by the lower billing rates," Williamson said.
RGC Resources' subsidiaries include Roanoke Gas, Diversified Energy Co. and RGC Ventures of Virginia. Williamson said Diversified Energy and RGC Ventures have not been very active of late, but said their contributions to 2009 year-end earnings helped boost profits past 2008 earnings.
RGC Resources trades on the Nasdaq exchange. Its stock price closed Wednesday at $30.12, down 56 cents.
