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Powell Industries (POWL) Posts Q1 Loss, Lowers Guidance - Analyst Blog

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Powell Industries, Inc. ( POWL ) reported first-quarter fiscal 2015 loss of 2 cents per share, against the Zacks Consensus Estimate of earnings of 26 cents. In the year-ago quarter, the company's earnings stood at 60 cents per share. Higher-than-expected costs to maintain customer project schedules at the Canadian operations and lower revenues primarily led to the disappointing results.

Powell Industries Inc. - Earnings Surprise | FindTheBest

Revenue

In the quarter under review, Powell Industries' total revenue came in at $152.6 million, missing the Zacks Consensus Estimate of $165 million by 7.5%. Reported revenues dropped 11.2% from $171.9 million a year ago.

Operational Update

New orders placed in the first quarter stood at $154 million, down 19.8% year over year. As of Dec 31, 2014, the company's backlog for continuing operations was $506 million versus $455 million in the year-ago period.

Cost of goods sold in the reported quarter decreased 3.8% year over year to $131.5 million.

Powell Industries' gross profit came in at $21.07 million, down 40.1% from $35.16 million a year ago.

Selling, general & administrative expenses during the quarter were $20.8 million, down 3.8% from the prior-year period. Research and development expenses increased marginally to $1.84 million.

Depreciation and amortization increased 15.4% year over year to $3.4 million in the quarter.

The company reported operating loss of $1.7 million in the quarter against operating income of $11.3 million a year ago.

Interest expenses in the first quarter decreased 52.2% year over year primarily due to lower long-term debt and capital lease obligations.

Financial Update

Long-term debt and capital lease obligations as of Dec 31, 2014 were $2.4 million, lower than $2.8 million as of Dec 31, 2013.

Capital expenditure in the quarter under review shot up around 229% to $18.96 million.

Guidance

Powell Industries reduced its guidance for fiscal 2015 revenues and earnings, taking into account the current business conditions and backlog. The company lowered its revenue guidance to $625-$675 million from the previous projection of $650-$710 million and earnings guidance to the range of $1.25-$1.75 per share from the earlier projection of $1.75-$2.30 per share.

Peer Release

Emerson Electric Company ( EMR ) reported first-quarter fiscal 2015 earnings per share of 75 cents per share, beating the Zacks Consensus Estimate of 73 cents by 2.7%.

Zacks Rank

Powell Industries currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the same sector are A. O. Smith Corporation ( AOS ) and Pioneer Power Solutions, Inc. ( PPSI ), each carrying a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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