Powell Industries Q3 Earnings Surpass Estimates, Revenues Miss

Powell Industries, Inc.’s POWL third-quarter fiscal 2025 (ended June 2025) adjusted earnings of $3.96 per share surpassed the Zacks Consensus Estimate of $3.73. The bottom line increased 4% year over year.

Powell’s total revenues of $286 million missed the consensus estimate of $295 million. The top line decreased 1% year over year. The year-over-year decline was primarily attributable to weakness in oil & gas and petrochemical markets, which was mostly offset by strength across electric utility and commercial & other industrial sectors.

Inside the Headlines

In the fiscal third quarter, revenues from the electric utility sector increased 31% year over year. The commercial & other industrial sector’s revenues increased 18%. However, revenues from the oil & gas and petrochemical sectors declined 8% and 36%, respectively, on a year-over-year basis.

In the fiscal third quarter, new orders totaled $362 million compared with $356 million in the year-ago quarter. The increase was driven by robust order activity in the oil & gas and commercial and other industrial sectors. Exiting the quarter, its backlog totaled $1.4 billion, up 7% on a sequential and 5% on a year-over-year basis.

Powell Industries, Inc. Price, Consensus and EPS Surprise

Powell Industries, Inc. price-consensus-eps-surprise-chart | Powell Industries, Inc. Quote

Margin Profile of POWL

In the fiscal third quarter, Powell Industries’ cost of sales decreased 3.9% year over year to $198.4 million. Gross profit increased 7.5% year over year to $87.9 million while the margin increased 230 basis points (bps) to 30.7%. Selling, general and administrative expenses were $25.1 million, up 14.1% year over year.

Operating income increased 4.9% year over year to $60.1 million. The operating margin was 21%, up 110 bps year over year.

Powell Industries’ Balance Sheet and Cash Flow

Exiting the third quarter of fiscal 2025, Powell Industries had cash equivalents and short-term investments of $433 million compared with $358.4 million at the end of fiscal 2024 (ended September 2024). Current liabilities were $427.3 million compared with $428 million at the end of fiscal 2024.

Stockholders’ equity totaled $594.9 million. In the first nine months of fiscal 2025, capital expenditure totaled $11.4 million, up 225.7% year over year.

In the same period, the company used $9.6 million for distributing dividends, up 1.1% on a year-over-year basis.

Fiscal 2025 Guidance

Given Powell Industries’ robust backlog, solid liquidity and a strong balance sheet, it looks forward to witnessing solid revenues and earnings in fiscal 2025 (ending September 2025).

POWL’s Zacks Rank & Stocks to Consider

The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked companies are discussed below:

Flowserve Corporation FLS presently sports a Zacks Rank of 1. FLS’ earnings surpassed the consensus estimate twice and missed on the other two occasions in the trailing four quarters. The average earnings surprise was 5.5%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2025 earnings has increased 3.4%.

Allegion plc ALLE currently sports a Zacks Rank of 1. ALLE has an impressive earnings surprise history, having outperformed the consensus estimate in each of the preceding four quarters, the average surprise being 7.9%.  In the past 60 days, the Zacks Consensus Estimate for Allegion’s 2025 earnings has increased 4.1%.

RBC Bearings Incorporated RBC currently carries a Zacks Rank #2 (Buy). RBC outperformed the consensus estimate thrice in the preceding four quarters and missed once, with an average surprise of 3.8%. In the past 60 days, the Zacks Consensus Estimate for RBC Bearings’ 2025 earnings has increased 1.4%.

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This article originally published on Zacks Investment Research (zacks.com).

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