Powell Industries lowers earnings outlook
Shares of Powell Industries Inc. (Nasdaq: POWL) are down following news the Houston-based maker of electrical energy control equipment lowered its fiscal 2007 outlook and narrowed its quarterly profit.
The net income for the fiscal 2007 second quarter ended March 31 was $2.3 million, or $0.20 per share, compared with restated net income of $3.8 million, or $0.34 per share, in the second quarter of fiscal 2006, the company said before the opening bell. Three analysts surveyed by Thomson Financial were looking for earnings of $0.34 per share.
On the other hand, revenues increased 44.2% to $141.9 million, compared with revenues of $98.4 million in the same quarter of 2006.
“Orders for the second quarter reached a record level of $168 million, which resulted in a backlog of over $400 million, the highest in [our]history,” Chairman and CEO Thomas W. Powell said. “The markets we serve are active, and we continue to see projects and opportunities that are well suited for Powell's products and services.”
However, Powell warned that costs associated with the relocation and start-up of one of the company’s product lines to Houston will be a drag on earnings until the middle of fiscal 2008, when the transaction is expected to be completed. The company said the costs amount to approximately $4.5 million, or $0.40 per share, for the entire fiscal year.
Consequently, Powell Industries reported that it now projects full year fiscal 2007 revenues in the range between $525 million and $550 million, and earnings in the range between $0.75 per share and $0.85 per share.
Wall Street was expecting the company to post earnings of $1.36 per share for the year.
At 1:06 p.m. ET shares had dropped $2.16, or 7%, to $28.66. The 52-week high is $37.25, achieved on April 13. The 52-week low of $18.42 was set on Sep. 11, 2006.
