Company Description

Powell Industries, Inc. designs and manufactures equipment and systems for the management and control of electrical energy in the United States and internationally. The company was founded in 1947 and has a market cap of $386 million.

Powell's share price has been steadily advancing since late November on positive earnings and bullish projections. The company's first-quarter results, reported on Feb 9, were ahead of expectations.

First-Quarter Results

Revenue for the quarter was up 16% from last year to $147.1 million. Net income more than doubled, coming in at $7.9 million compared to $3.6 million last year. This produced earnings of 68 cents per share, 8 cents ahead of the consensus estimate.

Consistent Results

Powell has produced consistent results over the last year in a tough market, having beat the consensus in each of the last four quarters by an average of 13 cents, or 28%.

Substantial Backlog

The company noted that it had accumulated a nice backlog of orders, totaling $509 million, with first-quarter new orders increasing to $172 million from $136 million last year.

Estimates Look Strong

The analyst community is bullish on Powell, with the next-year estimate up 13 cents in the last 30 days to $3.17 per share, a 14% earnings growth projection.

The Chart

Shares of Powell have been on a nice rally since bottoming out with the overall market in late November. This stock is currently pressuring a key level of resistance just above the $34 mark, take a look below.

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Company Description

Powell Industries, Inc. sells, designs, develops, manufactures, packages and services systems and equipment for the distribution, control and management of electrical energy and other dynamic processes. The principal products are switchgear and related equipment, bus duct and process control systems.

These products and systems are utilized primarily by refineries, petrochemical plants, utilities, paper mills, offshore platforms, commuter railways, vehicular transportation and numerous other industrial, commercial and governmental facilities.

Fourth Consecutive Surprise

Powell reported record revenues and earnings in fiscal 2008 when it made its latest announcement on Dec 10. Quarterly revenue was $167 million, up from $151 million one year ago.

Earnings per share were 72 cents, easily beating the Street's estimate of 57 cents. The 26% surprise was the company's fourth consecutive surprise with an average of 34% each time.

Optomistic Outlook

Powell also released its forecast for full-year 2009 results, which included earnings between $2.60 and $2.85. Full-year earnings for 2008 came in at $2.26.

CEO Patrick McDonald said "We enter 2009 with a backlog that provides the ability to reach even higher levels of performance."

A Good Value

Shares of POWL are trading at a good value, just 11.7 times earnings. The company also has a long-term growth rate of 14%, give it a PEG ratio of just 0.8.

The Chart

After testing resistance at $25 per share several times, POWL finally broke through on the earnings news. Shares are now trading above that level, which is now support. Take a look at the chart below.

"POWL" Free Stock Analysis: Buy? Sell? Hold?
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Company Description

Powell Industries manufactures systems and equipment for the management and distribution of electrical energy. It offers both products and services, including emergency service, spare parts and training on its systems.

Powell's customers operate in a diverse group of industries such as utilities, oil and gas producers, refineries, petrochemical plants, pulp and paper producers, mining operations, and commuter railways.

Powell Posts Record 2008

Despite a slowing economy, on Dec 10, Powell reported record orders, revenues and earnings for fiscal 2008. Net income soared to $8.3 million from $2.5 million in the fourth quarter of 2007.

Earnings per share jumped 272% to 72 cents from 22 cents in the year ago period. Analysts were expecting 57 cents.

Revenue rose 11% to $167.1 million from $150.5 million in 2007. It was the Electrical Power Products segment which dominated the quarter as revenue gained 10% to $159.8 million compared to $145.2 million in the fourth quarter of 2007.

Fiscal 2008 was also stellar. Revenue jumped 13.2% to $638.7 million from $564.3 million in fiscal 2007. Earnings per share also surged, increasing to $2.26 from 88 cents per share.

Strong Backlog

As of Sep 30, 2008, the backlog was $519 million compared to $464 million at the end of fourth-quarter 2007. It is down from the backlog as of the end of the third quarter, Jun 30, 2008, which was $553 million.

While the company saw record orders for 2008, new orders in the fourth quarter fell to $136 million from $200 million in the year ago period. They are also down compared to third-quarter 2008 orders of $188 million.

But the company is optimistic despite the challenging economic conditions.

"We enter 2009 with a backlog that provides the ability to reach even higher levels of performance," said Patrick L. McDonald, President and CEO.

"The long-term outlook for our business is solid; we have the right solutions for our customer base and are well positioned in our key markets. We believe we will play a significant role in both the short and long-term needs of our customers."

2009 Guidance

With a strong backlog, Powell guided to full year 2009 revenue in the range of $700 million to $725 million. Earnings per share are expected to be in the range of $2.60 to $2.85 per share.

Consensus Estimates Rise for 2009

With 2008 results being reported just last week, covering analysts have yet to update their 2009 estimates. But 2009 full-year consensus estimates have moved higher by 31 cents to $3.12 per share in the last 60 days. This is considerably higher than the company's forecast range.

Analysts expect 2009 year-over-year earnings growth of 37.83%.

Value Fundamentals

Powell Industries is a Zacks #1 Rank (strong buy) stock. It has surprised on estimates 4 consecutive quarters by an average of 33.97%.

POWL has attractive value characteristics. It is trading at just 9x forward earnings. The company's price-to-book is 1.55. Powell has a solid 1-year return on equity (ROE) of 13.37%.

"POWL" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research