What caused RGCO's EPS surprise in Q1 2025?

RGC Resources' (RGCO) EPS surprise in Q1 2025 was primarily driven by strong gas volume growth and new service connections, along with effective cost management.

1. **Gas Volume Growth**: The company experienced a 16% increase in total gas volumes compared to Q1 2024, driven by a 10% rise in heating degree days and increased demand for natural gas. This led to higher revenue and profitability.
2. **New Service Connections**: RGC Resources connected 197 new services in Q1 2025, up from 185 in Q1 2024, which contributed to the growth in gas volumes and revenue.
3. **Cost Management**: The company's capital expenditure (CapEx) increased by 8.4% to $5.7 million in Q1 2025, which supported the expansion of its operations and maintained its market position. However, the increase in CapEx was well-managed and did not negatively impact profitability.
4. **Dividend Payments**: RGC Resources declared a quarterly dividend of $0.21 per share, representing an annualized dividend of $0.83 and a yield of 4.02%. While dividend payments can impact net income, the company's dividend payout ratio of 64.3% indicates that it is sufficiently covered by earnings.

In summary, RGC Resources' EPS surprise in Q1 2025 was primarily due to strong gas volume growth, new service connections, and effective cost management. These factors collectively contributed to the company's financial performance and exceeded market expectations.