The 10-second takeaway
For the quarter ended March 31 (Q2), Powell Industries beat expectations on revenue and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue increased significantly and GAAP earnings per share increased significantly.
Gross margins contracted, operating margins improved, and net margins expanded.
Powell Industries booked revenue of $181.5 million. The five analysts polled by S&P Capital IQ expected revenue of $155.6 million on the same basis. GAAP reported sales were 45% higher than the prior-year quarter's $125.1 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.63. The five earnings estimates compiled by S&P Capital IQ forecast $0.21 per share. GAAP EPS of $0.63 for Q2 were 320% higher than the prior-year quarter's $0.15 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 18.9%, 100 basis points worse than the prior-year quarter. Operating margin was 6.6%, 490 basis points better than the prior-year quarter. Net margin was 4.1%, 270 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $163.6 million. On the bottom line, the average EPS estimate is $0.43.
Next year's average estimate for revenue is $656.0 million. The average EPS estimate is $1.04.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 107 members out of 118 rating the stock outperform, and 11 members rating it underperform. Among 33 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 30 give Powell Industries a green thumbs-up, and three give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Powell Industries is outperform, with an average price target of $41.50.
Over the decades, small-cap stocks like Powell Industries have provided market-beating returns, provided they're value-priced and have solid businesses. Read about a pair of companies with a lock on their markets in "Too Small to Fail: Two Small Caps the Government Won't Let Go Broke." Click here for instant access to this free report.
- Add Powell Industries to My Watchlist.