Powell Industries Earnings Preview

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If Powell Industries (NAS: POWL) misses estimates again it will be the third consecutive quarter for the company. The company will unveil its latest earnings Tuesday. Powell Industries develops, designs, manufactures, and services custom engineered-to-order equipment and systems for the management and control of electrical energy and other critical processes.

What analysts say:

  • Buy, sell, or hold?: Analysts generally think investors should hang on to Powell Industries, with half rating the stock a hold. Analysts like Powell Industries better than competitor American Superconductor overall. Two out of 13 analysts rate American Superconductor a buy compared with two of four for Powell Industries. Wall Street has warmed to the stock over the past three months, with analysts increasing their endorsement from hold to moderate buy.
  • Revenue forecasts: On average, analysts predict $129.8 million in revenue this quarter. That would represent a decline of 6.5% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.25 per share. Estimates range from $0.20 to $0.29.

What our community says:
CAPS Al- Stars are solidly backing the stock with 88.9% assigning it an "outperform" rating. The community at large concurs with the All-Stars with 89.8% giving it a rating of "outperform." Fools have embraced Powell Industries, though the message boards have been quiet lately with only 63 posts in the past 30 days. Though still bullish, the CAPS rating of four out of five stars for Powell Industries is a bit more pessimistic than the community assessment.

Management:
Revenue has fallen for the past three quarters. The company's gross margin shrank by 5.3 percentage points in the last quarter. Revenue fell 11.6% while cost of sales fell 5.3% to $100 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

20.4%

20.7%

22.0%

27.5%

Operating Margin

2.3%

3.0%

(0.7%)

11.5%

Net Margin

2.0%

2.0%

(3.6%)

7.4%

For all our Powell Industries-specific analysis, including earnings and beyond, add Powell Industries to My Watchlist.

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At the time this article was published

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