Powell Industries Q3 Earnings Surpass Estimates, Revenues Miss

Core Insights - Powell Industries, Inc. reported adjusted earnings of $3.96 per share for Q3 fiscal 2025, exceeding the Zacks Consensus Estimate of $3.73, marking a 4% year-over-year increase [1][10] - Total revenues for the quarter were $286 million, falling short of the consensus estimate of $295 million, representing a 1% year-over-year decline primarily due to weakness in the oil & gas and petrochemical markets [2][10] Revenue Breakdown - Revenues from the electric utility sector increased by 31% year over year, while the commercial & other industrial sector saw an 18% increase [3] - Conversely, revenues from the oil & gas sector declined by 8%, and the petrochemical sector experienced a significant 36% decrease year over year [3] Orders and Backlog - New orders totaled $362 million, up from $356 million in the same quarter last year, driven by strong activity in the oil & gas and commercial sectors [4] - The backlog at the end of the quarter reached $1.4 billion, reflecting a 7% sequential increase and a 5% year-over-year increase [4] Margin Profile - The cost of sales decreased by 3.9% year over year to $198.4 million, while gross profit increased by 7.5% to $87.9 million, resulting in a gross margin of 30.7%, up 230 basis points [5] - Selling, general and administrative expenses rose by 14.1% to $25.1 million, with operating income increasing by 4.9% to $60.1 million, leading to an operating margin of 21%, up 110 basis points year over year [5] Balance Sheet and Cash Flow - As of the end of Q3 fiscal 2025, Powell Industries had cash equivalents and short-term investments of $433 million, an increase from $358.4 million at the end of fiscal 2024 [6] - Current liabilities were slightly reduced to $427.3 million from $428 million at the end of fiscal 2024, with stockholders' equity totaling $594.9 million [6] - Capital expenditures for the first nine months of fiscal 2025 amounted to $11.4 million, reflecting a significant year-over-year increase of 225.7% [6] Dividend Distribution - The company distributed $9.6 million in dividends during the same period, which is a 1.1% increase year over year [7] Future Outlook - Powell Industries anticipates solid revenues and earnings for fiscal 2025, supported by a robust backlog, strong liquidity, and a healthy balance sheet [8]