Powell Industries Reports Stable Q3 2025 Earnings with Increased Demand and Acquisitions

Powell Industries reported stable Q3 2025 results with revenues of $286 million, an 8% increase in gross profit, and a 4% rise in net income to $48 million. New orders reached $362 million, and the backlog grew 7% to $1.4 billion. The company secured its largest utility order and additional substantial oil and gas orders. Powell remains optimistic about its growth trajectory, driven by strategic acquisitions and product diversification.

Powell Industries reported stable third-quarter (Q3) 2025 results, with revenues of $286 million, an 8% increase in gross profit, and a 4% rise in net income to $48 million. The company's earnings per share (EPS) of $3.96 exceeded expectations, marking a 4% increase year-over-year (YoY) [1]. Powell Industries also secured substantial new orders, totaling $362 million, and saw its backlog grow 7% to $1.4 billion.

The company's performance was highlighted by strong gross margin improvement to 30.7%, up by 230 basis points from the previous year. This was driven by favorable volume leverage and effective project execution. Powell Industries' diversified market presence, particularly in the electric utility sector, contributed to its competitive position.

Powell Industries secured its largest utility order, a $60 million project for a new power generation facility, and substantial oil and gas orders, including two large custom power control room module projects totaling over $80 million. These projects are set to be deployed to separate offshore locations in the Gulf of America and Africa.

The company remains optimistic about its growth trajectory, driven by strategic acquisitions and product diversification. Powell Industries maintains a strong financial position with a current ratio of 2.06, indicating excellent liquidity. The company continues to operate debt-free, holding $433 million in cash and short-term investments.

Despite the revenue miss compared to forecasts, Powell Industries' stock closed at $236.24, a 4.36% decrease from the previous session, and further declined by 12.08% in pre-market trading. The stock remains above its 52-week low of $146.02 but is significantly below the high of $364.98. InvestingPro analysis suggests the stock is currently undervalued, with a PEG ratio of just 0.24, indicating attractive pricing relative to growth.

Powell Industries' CEO Brett Cope stated, "Powell delivered a strong third quarter as operationally the team continues to execute at a high level." CFO Mike Metcalf added, "We have very good visibility. Our queue will come out later today. You’ll see that roughly 65% of our backlog is slated to convert to revenue over the next twelve months."

Powell Industries' positive outlook is supported by a backlog extending into late fiscal 2027, with approximately 65% of this backlog expected to convert to revenue in the next 12 months. The company anticipates maintaining margin levels similar to the current year-to-date rates, with strong performance anticipated across all served markets.

References:
[1] https://www.investing.com/news/transcripts/earnings-call-transcript-powell-industries-q3-2025-reports-steady-eps-stock-dips-93CH-4174045