Powell Industries Inc. (NASDAQ: POWL) reported a surge in new orders for its fiscal second quarter, with the electrical-equipment maker booking $490 million in orders—a 97% jump from the prior year. That pushed the company's backlog to a record $1.8 billion, signaling strong demand from data centers and other industrial sectors.
However, the company's quarterly profit slipped 1% to $45.9 million, or $1.25 per diluted share, missing analyst expectations. Revenue rose 6% year over year to $296.6 million, also falling short of Wall Street's forecasts. The mixed results sent shares down nearly 2% in Monday's regular session to $269.95, though they recovered about 1% in after-hours trading.
After the quarter closed on March 31, Powell disclosed its largest-ever single order: a data center contract exceeding $400 million. Chairman and CEO Brett Cope described the award as a milestone, underscoring the company's growing role in powering the AI and cloud computing boom. The order adds to a robust pipeline that already included strong demand from commercial, utility, and energy sectors.
Powell's book-to-bill ratio—a key measure of orders relative to revenue—reached 1.7, indicating that incoming orders far outpaced shipments. The company's backlog has grown 12% since December 31 and stands 33% higher than a year ago. Cash and short-term investments totaled $544.9 million at quarter-end.
By end market, commercial and other industrial revenue rose 35%, electric utility sales climbed 14%, and oil and gas revenue increased 11%. Petrochemical revenue, however, dropped 37%, highlighting the company's ongoing exposure to cyclical industrial spending even as data center demand takes center stage.
Chief Financial Officer Michael Metcalf said the company expects margins to remain steady versus last year, given the mix of existing backlog. He added that the accelerating order flow provides room to invest in additional capacity. However, rising selling, general and administrative expenses, along with higher R&D costs, weighed on profits this quarter.
Execution remains a key risk. In its regulatory filing, Powell noted that backlog contracts are subject to changes, reductions, or cancellations, and that delays in shipping large orders could pressure margins. The company also faces competition from larger players like Schneider Electric and GE Vernova, both of which have recently reported robust data center demand.
Investors will be watching closely for updates on the timing of the $400 million data center contract, as well as plans for capacity expansion. Powell is scheduled to hold a conference call on Tuesday at 11 a.m. Eastern to discuss these results and outlook.