What happened

Powell Industries (POWL 5.33%) reported quarterly results that easily surpassed last year's numbers. Investors took note, sending shares of Powell up as much as 20% on Tuesday.

So what

Powell engineers and manufactures electrical distribution, control, and monitoring systems for large industrial users, including utilities, oil and gas producers, mining operations, and commuter railways. On Monday night, the company announced earnings of $0.73 per share in its fiscal fourth quarter ending Sept. 30 on revenue of $163 million.

That's well above the $0.28 per share Powell earned on $129.5 million in revenue during the same three months of last year. Powell also booked $259 million in new orders during the quarter, its highest total since the second quarter of fiscal 2020, fueled by a solid post-pandemic recovery in a number of its end markets.

"Activity in our core oil, gas, and petrochemical markets continues to improve from the pandemic lows, as we booked a large industrial order to support the production of Liquefied Natural Gas," CEO Brett A. Cope said in a statement. "This strong performance is in large part a direct result of our focused and deliberate efforts around our strategic initiatives to diversify our business, strengthen our services offerings, emphasize technology and ensure that Powell is positioned for future success."

Now what

Looking ahead to fiscal 2023, Powell chief financial officer Michael Metcalf said, "we are very encouraged by the commercial activity that we're experiencing across our core end markets." Based on the company's current $592 million order book and strong inbound inquiries for new business, Powell is expecting revenue growth in most sectors in the new year and profitability to "significantly improve" compared to the year that just finished.

Overall, it is a tough industrial climate to sell into, but Powell's energy customers have seen a boost this year. And the company's products tend to be a small, but vital, part of a project, meaning it is not the type of expense that is typically deferred. Powell shares, which at one point were down more than 35% for the year, are now positive for the year but still 30% below their pre-pandemic levels. If business is normalizing, this stock could still have room to run.