Powell Industries Earnings Preview

If Powell Industries (Nasdaq: POWL  ) misses estimates again it will be the fourth consecutive quarter for the company. The company will unveil its latest earnings on Tuesday, Dec. 6. Powell Industries develops, designs, manufactures, and services custom engineered-to-order equipment and systems for the management and control of electrical energy and other critical processes.

What analysts say:

• Buy, sell, or hold?: Analysts think investors should stand pat on Powell Industries, with two of three analysts rating it hold. Analysts like Powell Industries better than competitor American Superconductor overall. One out of nine analysts rate American Superconductor a buy compared to one out of three for Powell Industries.
• Revenue forecasts: On average, analysts predict $162.5 million in revenue this quarter. That would represent a rise of 21.5% from the year-ago quarter.
• Wall Street earnings expectations: The average analyst estimate is earnings of $0.15 per share. Estimates range from $0.05 to $0.22.

What our community says:
CAPS All-Stars are solidly behind the stock, with 87.8% assigning it an outperform rating. The community at large concurs with the All-Stars, with 88.9% granting it a rating of outperform. Fools are gung-ho about Powell Industries, though the message boards have been quiet lately, with only 63 posts in the past 30 days. Despite the majority sentiment in favor of Powell Industries, the stock has a middling CAPS rating of three out of five stars.

Management:
The company's gross margin shrank by 11 percentage points in the last quarter. Revenue rose 2.3% while cost of sales rose 17.9% to $118.6 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter	Q3	Q2	Q1	Q4
Gross Margin	16.5%	20.4%	20.7%	22%
Operating Margin	2%	2.3%	3%	(0.7%)
Net Margin	1.2%	2%	2%	(3.6%)

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Earnings estimates provided by Zacks.