Powell Industries Q2 Earnings Surpass Estimates, Revenues Increase 9.2%

Core Insights - Powell Industries, Inc. reported adjusted earnings of $3.81 per share for Q2 fiscal 2025, exceeding the Zacks Consensus Estimate of $3.35, marking a year-over-year increase of 38.6% driven by higher revenues [1] - Total revenues for the quarter were $278.6 million, slightly missing the consensus estimate of $277 million, but reflecting a year-over-year growth of 9.2% primarily due to strength in the electric utility and commercial sectors [1] Revenue Breakdown - Revenues from the electric utility sector reached $70.3 million, a significant increase of 48% year over year [2] - The petrochemical sector generated $43.7 million in revenues, which is a decline of 13% year over year [2] - Revenues from the commercial and other industrial sectors increased by 16% to $40.4 million [2] Order and Backlog Performance - New orders totaled $249 million in the fiscal second quarter, down from $269 million in the same quarter last year, with robust activity noted in the oil & gas and commercial sectors [3] - The backlog at the end of the quarter stood at $1.3 billion, remaining relatively flat both sequentially and year-over-year [3] Margin and Cost Analysis - Cost of sales increased by 1.5% year over year to $195.2 million, while gross profit rose by 33% to $83.4 million, resulting in a gross margin increase of 530 basis points to 29.9% [4] - Operating income surged by 49.2% year over year to $58.9 million, with an operating margin of 21.1%, up 560 basis points year over year [4] Financial Position - As of the end of Q2 fiscal 2025, Powell Industries had cash equivalents and short-term investments of $389.3 million, up from $358.4 million at the end of fiscal 2024 [5] - Current liabilities decreased to $404.8 million from $428 million at the end of fiscal 2024, while stockholders' equity totaled $541.4 million [5] - Capital expenditures for the first six months of fiscal 2025 amounted to $6.3 million, reflecting a substantial increase of 192.9% year over year [5] Dividend and Guidance - The company distributed $6.4 million in dividends, marking a year-over-year increase of 1.8% [6] - Powell Industries anticipates strong revenues and earnings for fiscal 2025, supported by a robust backlog and solid liquidity [7]