Powell’s third quarter results surpassed Wall Street’s expectations for both revenue and earnings, yet the market responded negatively following the announcement. Management attributed the quarter’s performance to increased project execution, particularly in nonindustrial markets—such as Electric Utility and Commercial sectors—which now comprise a much larger share of backlog than five years ago. CEO Brett Cope described the quarter as a reflection of “the ongoing high level of project execution across all of our operations,” noting significant progress in diversifying beyond traditional oil and gas markets. The company also highlighted favorable gross profit margins driven by strong pricing discipline and operational throughput. However, some end markets, like oil and gas and petrochemicals, experienced softness, while the mix of projects shifted toward smaller and medium-sized orders rather than large-scale contracts.

Is now the time to buy POWL? Find out in our full research report (it’s free for active Edge members).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Powell’s Q3 Earnings Call

• John Franzreb (Sidoti & Company) asked about changes in the competitive landscape and pricing. CEO Brett Cope explained that Electric Utility and data center markets are more demand-driven and less price sensitive, while certain oil and gas subsectors are “a little softer, a little bit more price sensitive.”

• Alfred Moore (ROTH Capital) questioned the timing behind the modest decline in Commercial and Other Industrial revenue. Cope attributed the decline to project timing, emphasizing that opportunities in the sector, particularly data centers, are “clearly growing.”

• Moore (ROTH Capital) sought more detail on sustainability of Electric Utility growth. Cope highlighted the company’s decade-long strategy in the sector and noted that demand is robust, with plans to “grab as much of that as we can.”

• Jon Braatz (Kansas City Capital) inquired about delays in LNG project final investment decisions. Cope acknowledged the slower pace but expressed confidence in the “very strong activity” and fundamentals supporting future LNG demand.

• Franzreb (Sidoti & Company) asked about the sustainability of margin gains from project closeouts. CFO Michael Metcalf responded that closeouts were heavier than usual in 2025 but expects continued strong execution and margin benefits into the next year.

Catalysts in Upcoming Quarters

In the coming quarters, our analysts will be monitoring (1) the pace at which Powell converts its growing backlog into revenue, especially in Electric Utility and data center segments; (2) the impact of the Jacintoport facility expansion on capacity and order fulfillment; and (3) early returns from the Remsdaq acquisition as Powell integrates automation offerings. The sustainability of margins and new product launches will also be important signposts for execution.

Powell currently trades at $300.86, down from $321.66 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free for active Edge members).

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