Powell Industries Inc (POWL) Q2 2024 Earnings Report

Powell Industries reported a robust fiscal second quarter 2024, with revenue up 49% year over year to $255.1 million and a gross margin of 24.6%, supported by healthier project activity in oil & gas and petrochemical end markets. Net income reached $33.5 million ($2.75 per diluted share), roughly four times the year-ago period, as operating leverage expanded and backlog remained near historic highs at about $1.3 billion. The company continued capacity expansion in Houston to support large power control room projects and is pursuing additional capacity and inorganic growth opportunities while maintaining disciplined cost controls. Cash generation remained strong and the balance sheet was exceptionally liquid with effectively no net debt, providing ample liquidity to fund backlog growth and capex plans. Management highlighted sustained momentum in core industrial markets, along with meaningful opportunities in data centers and utility segments, yet cautioned about near-term LNG project timing risks and ongoing macro uncertainty.
The outlook remains cautious but constructive: management characterized project activity and new orders as “relatively unchanged” for the year, with gross margins projected in the low-to-mid-20s and a backlog that should sustain profitability through fiscal 2024 and into 2025. The near-term emphasis will be on productivity, capacity optimization, and expanding the electrical automation platform, while evaluating selective capacity expansions and inorganic growth opportunities. Investors should monitor backlog conversion timing, data center market penetration, and international market resurgence as key drivers of the next phase of growth.