Powell Industries, Inc. has recently released its 10-Q report, providing insights into its financial performance and operations. The company, headquartered in Houston, Texas, designs, manufactures, and services custom-engineered equipment and systems primarily for the oil and gas, petrochemical, electric utility, and industrial markets. Its products range from integrated power control room substations to medium-voltage circuit breakers and control gears, with operations spanning across the United States, Canada, and several international locations.
Management’s Discussion and Analysis of Financial Condition and Results of Operations reveals a 49% increase in revenue to $255.1 million for the quarter ended March 31, 2024, driven by a surge in project backlog resulting from large contracts awarded in Fiscal 2023 and solid bookings in the first half of Fiscal 2024. Gross profit also rose by 88% to $62.7 million, with a gross profit margin of 25%. Selling, general, and administrative expenses decreased by 4% to $20.9 million, and the company recorded a net income of $33.5 million, or $2.75 per diluted share, compared to $8.5 million, or $0.70 per diluted share, in the same quarter of the previous year.
Looking at the six months ended March 31, 2024, revenues increased by 51% to $449.1 million, primarily due to a surge in project backlog from large contracts awarded throughout Fiscal 2023 and solid bookings in the first half of Fiscal 2024. Gross profit also increased by 110% to $110.9 million, with a gross profit margin of 25%. The company recorded a net income of $57.6 million, or $4.73 per diluted share, compared to $9.6 million, or $0.80 per diluted share, in the same period of the previous year.
The order backlog at March 31, 2024, stood at $1.3 billion, consistent with the backlog at September 30, 2023, and an increase of 25% from March 31, 2023. Despite solid bookings in the first half of Fiscal 2024, the decrease was due to a normalization of the oil and gas sector and fewer large orders awarded in Fiscal 2024.
Powell Industries, Inc. remains optimistic about its order activity in core markets and continues to diversify its business beyond oil, gas, and petrochemical markets. The company's backlog, which remained at $1.3 billion as of March 31, 2024, with approximately $733 million expected to be recognized as revenue within the next twelve months, reflects its confidence in future revenue generation. However, the company acknowledges that its operating results are subject to short-term earnings variability and the timing of project execution, impacted by factors such as new order awards, project backlog, and customer construction schedules. As a result of these announcements, the company's shares have moved 21.8% on the market, and are now trading at a price of $174.16. For more information, read the company's full 10-Q submission here.
