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Powell Industries - Aggressive Growth
9/4/2012 1:00:00 AM
Earnings momentum for Powell Industries, Inc. ( POWL ) improved after this provider of custom engineered solutions reported solid fiscal third quarter 2012 (ended June 30, 2012) financial results, which included a 117.0% earnings surprise. This Zacks #1 Rank (Strong Buy) offers an attractive opportunity for growth-seeking investors given its long-term growth projection of 8.0%, solid backlog, strengthening demand in key end markets and new orders.
Upbeat Quarter Results/Promising Guidance
On August 7, Powell Industries, Inc. reported fiscal third quarter 2012 earnings of $1.02 per share, surpassing the Zacks Consensus Estimate of 47 cents by 117.0% and way ahead of last year's one cent.
Revenue improved 37.3% to $194.1 million, while new orders and backlog were strong at $133 million and $433 million, respectively. The quarter also witnessed successful execution of large capital projects, especially in the international oil and gas as well as light rail traction market.
Based on its impressive fiscal third quarter results and solid backlog, management revised its guidance for the fiscal year 2012 and now expects revenue between $700 million and $725 million versus the earlier expectation range of $675 million - $725 million. The earnings per share guidance has been revised to between $1.95 and $2.20 from the range of $1.25 - $1.50.
Positive Earnings Momentum
Over the last 30 days, three of four estimates increased for fiscal 2012 (ending September 2012), leading to a 50.3% rise in the Zacks Consensus Estimate to $2.18 per share. A similar trend followed for fiscal year 2013, with three of four upward estimate revisions leading to an 18.3% rise in the Zacks Consensus Estimate to $2.65 per share.
The Zacks Consensus Estimates represent year-over-year earnings growth of 320.2% for fiscal 2012 and 21.3% for fiscal 2013.
Powell Industries, Inc. is currently trading at a price-to-sales (P/S) ratio of 0.6, in line with the peer group average. On a forward P/E basis, shares trade at 17.2x, versus the peer group average of 10.2x. The company offers a ROE of 7.0%; same as its peer group average.
The stock started gaining momentum in the second half of 2010. A rising Zacks Consensus Estimate since the beginning of 2012 is indicative of bright growth prospects for the stock in the years ahead.
Powell Industries, Inc. is based in Houston, Texas, and was incorporated in 1947. It operates in the Industrial Electrical Equipment sector; focusing primarily on manufacturing and supply of custom engineered solutions for the transportation, environmental, energy, industrial and utility industries. It currently has a market capitalization of approximately $446 million.
POWELL INDS (POWL): Free Stock Analysis Report
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