It has been about a month since the last earnings report for Powell Industries (POWL). Shares have added about 1.5% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Powell Industries due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Powell Industries Q2 Earnings & Revenues Miss Estimates
Powell Industries’ second-quarter fiscal 2026 (ended March 2026) adjusted earnings of $1.25 per share missed the Zacks Consensus Estimate of $1.35. The bottom line decreased 1% year over year.
Powell Industries’ total revenues of $297 million missed the consensus estimate of $298 million. However, the top line increased 6% year over year. The year-over-year increase was primarily attributable to strength in the electric utility and oil & gas markets.
Inside the Headlines
In the fiscal second quarter, revenues from the electric utility sector increased 14% year over year. The oil & gas sector’s revenues increased 11%. Revenues from the commercial & other industrial sector increased 35% while the petrochemical sector declined 37%, respectively, on a year-over-year basis.
In the fiscal second quarter, new orders totaled $490 million compared with $249 million in the year-ago quarter. The increase was driven by robust order activity in the electric utility, commercial and other industrial sectors. Exiting the quarter, its backlog totaled $1.8 billion, up 12% on a sequential and 33% on a year-over-year basis.
Margin Profile
In the fiscal second quarter, Powell Industries’ cost of sales increased 6.9% year over year to $208.7 million. Gross profit increased 5.4% year over year to $87.9 million while the margin decreased 30 basis points (bps) to 29.6%. Selling, general and administrative expenses were $25.8 million, up 18.7% year over year.
Operating income decreased 2.3% year over year to $57.6 million. The operating margin was 19.4%, down 170 bps year over year.
Powell Industries’ Balance Sheet and Cash Flow
Exiting the second quarter of fiscal 2026, Powell Industries had cash equivalents and short-term investments of $544.9 million compared with $475.5 million at the end of fiscal 2025 (ended September 2025). Current liabilities were $447.3 million compared with $446.4 million at the end of fiscal 2025.
Stockholders’ equity totaled $709.1 million. In the first six months of fiscal 2026, capital expenditure totaled $3.9 million, down 38.4% year over year.
In the same period, the company used $6.51 million for distributing dividends, up 1.6% on a year-over-year basis.
Fiscal 2026 Guidance
Given Powell’s robust backlog, solid liquidity and a strong balance sheet, it looks forward to witnessing solid revenues and earnings in fiscal 2026 (ending September 2026).
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a flat trend in fresh estimates.
VGM Scores
At this time, Powell Industries has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for value investors.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Powell Industries has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Powell Industries, Inc. (POWL): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).