Powell Industries, Inc.’s POWL fourth-quarter fiscal 2024 (ended September 2024) adjusted earnings of $3.77 per share surpassed the Zacks Consensus Estimate of $3.49. The bottom line increased 74% year over year. Results benefited primarily from higher revenues generated in the quarter. Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Powell’s total revenues of $275.1 million missed the consensus estimate of $277 million. The top line increased 32% year over year. The year-over-year increase was primarily driven by strength across all sectors, including petrochemical, oil & gas and commercial & other industrial sectors.

In fiscal 2024, its revenues totaled $1 billion, reflecting an increase of 45% year over year. Adjusted earnings were $12.29 per share, up 175% year over year.

Inside the Headlines

In the fiscal fourth quarter, it generated revenues of $50.4 million from the petrochemical sector, up 112% year over year. Revenues from the oil & gas sector amounted to $115.4 million, up 23% year over year. The commercial & other industrial sector’s revenues increased 66% to $48.3 million.

In the fiscal fourth quarter, new orders totaled $267 million compared with $171 million in the year-ago quarter. Exiting the quarter, its backlog totaled $1.3 billion, relatively flat on a sequential as well as year-over-year basis.

Margin Profile of POWL

In the fiscal fourth quarter, Powell’s cost of sales increased 24.2% year over year to $194.6 million. Gross profit increased 54.6% year over year to $80.4 million and the margin increased 430 basis points (bps) to 29.2%. Selling, general and administrative expenses were $21.6 million, up 5.9% year over year.

Operating income increased 89% year over year to $56.1 million. The operating margin was 20.4%, up 610 bps year over year.

Powell’s Balance Sheet and Cash Flow

Exiting fiscal 2024, Powell had cash equivalents and short-term investments of $358.4 million compared with $279 million at the end of fiscal 2023. Current liabilities were $428 million compared with $395.7 million at the end of fiscal 2023.

Stockholders’ equity totaled $483.1 million. In fiscal 2024, capital expenditure totaled $12 million, up 53.8% year over year.

In the same period, the company used $12.7 million for distributing dividends, relatively stable on a year-over-year basis.

2025 Guidance

Powell expects to witness continued strength across most of the end markets across all geographies. Given the company’s robust backlog, solid liquidity and a strong balance sheet, it looks forward to witnessing strong financial results in fiscal 2025 (ending September 2025).

Zacks Rank & Stocks to Consider

POWL currently carries a Zacks Rank #3 (Hold). Here are some better-ranked stocks from the same space:

Kadant Inc. KAI presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It has a trailing four-quarter average earnings surprise of 17.2%. The Zacks Consensus Estimate for KAI’s 2024 earnings has improved 1.8% in the past 60 days.

Atmus Filtration Technologies Inc. ATMU presently has a Zacks Rank of 2 and a trailing four-quarter earnings surprise of 13.8%, on average. The consensus estimate for ATMU’s 2024 earnings has increased 1.3% in the past 60 days.

Zurn Elkay Water Solutions Corporation ZWS presently carries a Zacks Rank of 2. ZWS delivered a trailing four-quarter earnings surprise of 8.5%, on average. The Zacks Consensus Estimate for Zurn Elkay’s 2024 earnings has increased 2.5% in the past 60 days.

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