Unpacking Q2 Earnings: Powell (NASDAQ:POWL) In The Context Of Other Electrical Systems Stocks

As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the electrical systems industry, including Powell (NASDAQ:POWL) and its peers.

Like many equipment and component manufacturers, electrical systems companies are buoyed by secular trends such as connectivity and industrial automation. More specific pockets of strong demand include Internet of Things (IoT) connectivity and the 5G telecom upgrade cycle, which can benefit companies whose cables and conduits fit those needs. But like the broader industrials sector, these companies are also at the whim of economic cycles. Interest rates, for example, can greatly impact projects that drive demand for these products.

The 13 electrical systems stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 2.8% while next quarter’s revenue guidance was 2.4% below.

Thankfully, share prices of the companies have been resilient as they are up 6.2% on average since the latest earnings results.

Powell (NASDAQ:POWL)

Originally a metal-working shop supporting local petrochemical facilities, Powell (NYSE:POWL) has grown from a small Houston manufacturer to a global provider of electrical systems.

Powell reported revenues of $286.3 million, flat year on year. This print fell short of analysts’ expectations by 5.1%. Overall, it was a mixed quarter for the company with an impressive beat of analysts’ EBITDA estimates.

Brett A. Cope, Powell’s Chairman and Chief Executive Officer, stated, “I am very proud of the Powell team as we delivered another strong quarter of results. We continue to execute our project backlog at a high level, achieving a gross margin of 30.7% in the current quarter, an improvement of 230 basis points compared to the prior year.”

The stock is up 22.1% since reporting and currently trades at $290.

Is now the time to buy Powell? Access our full analysis of the earnings results here, it’s free.

Best Q2: LSI (NASDAQ:LYTS)

Enhancing commercial environments, LSI (NASDAQ:LYTS) provides lighting and display solutions for businesses and retailers.

LSI reported revenues of $155.1 million, up 20.2% year on year, outperforming analysts’ expectations by 11.6%. The business had an incredible quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.

The market seems happy with the results as the stock is up 22.7% since reporting. It currently trades at $23.69.

Is now the time to buy LSI? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: Whirlpool (NYSE:WHR)

Credited with introducing the first automatic washing machine, Whirlpool (NYSE:WHR) is a manufacturer of a variety of home appliances.

Whirlpool reported revenues of $3.77 billion, down 5.4% year on year, falling short of analysts’ expectations by 3%. It was a softer quarter as it posted full-year EPS guidance missing analysts’ expectations.

As expected, the stock is down 20.3% since the results and currently trades at $78.

Read our full analysis of Whirlpool’s results here.

Sanmina (NASDAQ:SANM)

Founded in 1980, Sanmina (NASDAQ:SANM) is an electronics manufacturing services company offering end-to-end solutions for various industries.

Sanmina reported revenues of $2.04 billion, up 10.9% year on year. This print beat analysts’ expectations by 3.1%. Aside from that, it was a mixed quarter as it also logged a solid beat of analysts’ adjusted operating income estimates but a significant miss of analysts’ EBITDA estimates.

The stock is up 16.1% since reporting and currently trades at $114.11.

Read our full, actionable report on Sanmina here, it’s free.

Methode Electronics (NYSE:MEI)

Founded in 1946, Methode Electronics (NYSE:MEI) is a global supplier of custom-engineered solutions for Original Equipment Manufacturers (OEMs).

Methode Electronics reported revenues of $240.5 million, down 7% year on year. This result topped analysts’ expectations by 10.8%. Overall, it was a stunning quarter as it also logged a solid beat of analysts’ EBITDA estimates and full-year EBITDA guidance exceeding analysts’ expectations.

The stock is up 1.5% since reporting and currently trades at $7.60.

Read our full, actionable report on Methode Electronics here, it’s free.

Market Update

Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.

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