Q3 2026 Powell Industries Inc Earnings Call Transcript
Key Points
- Record new orders of $934 million in Q3, nearly 3x higher than the prior year, driving backlog to a record $2.4 billion.
- Gross margin remained strong at 30.6%, supported by favorable project mix, operating leverage, and stable pricing.
- Robust demand across all core end markets, including electric utility, data centers, LNG, and petrochemicals, with early signs of petrochemical recovery.
- Strategic capacity expansions underway, including new leases and the Jacintoport facility, expected to support over $100 million in incremental annualized revenue.
- Strong liquidity position with $634 million in cash and no debt, providing flexibility for future investments and M&A.
- Revenue growth of 9% was modest and slightly below Street expectations due to project timing and lumpiness.
- International revenues declined slightly, driven by softer Canadian market conditions.
- Petrochemical market revenues were down 49% year-over-year, though early recovery signs are emerging.
- Potential labor shortages anticipated in fiscal 2027-2028 due to increased construction activity across the U.S., which could impact operations.
- SG&A expenses increased due to higher compensation and the Remsdaq acquisition, with further pressure expected from facility expansions.
Welcome to the Powell Industries earnings conference call. (Operator Instructions) Please note, this event is being recorded.
I would now like to turn the conference over to Mr. Robert Winters, Investor Relations. Thank you. Please go ahead.
Thank you, operator, and good morning, everyone. Thank you for joining us for Powell Industries conference call today to review fiscal year 2026 third quarter results. With me on the call are Brett Cope, Powell's Chairman and CEO; and Mike Metcalf, Powell's CFO.
There will be a replay of today's call, and it will be available via webcast by going to the company's website powellind.com, or a telephonic replay will be available until August 11. The information on how to access the replay was provided in yesterday's earnings release.
Please note that information reported on this call speaks only as of today, August 4, 2026, and therefore, you are advised that any time-sensitive information may no longer be accurate at the time of replay
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