Power Solutions stock plunges after weak industrial and transportation demand outlook

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Power Solutions International's (PSIX [https://seekingalpha.com/symbol/PSIX]) shares slipped 16% in post-market trading on Thursday, despite the company reporting higher quarterly sales and profit, as investors took note of headwinds in the industrial and transportation markets.

Third-quarter 2025 sales rose 62% to $203.8 million, driven by an $85.3 million increase in the power systems market, partly offset by declines of $4.7 million in industrial and $2.6 million in transportation markets.

The Illinois-based cleantech manufacturer and supplier of industrial and on-road engine and power solutions said it expects sales to grow 45% in 2025 versus 2024, driven by rising demand in the power systems sector, including products for data centers, while sales in the industrial and transportation markets are projected to remain flat.

"...we are prioritizing the rapidly expanding data center sector by enhancing our manufacturing capacity and capabilities to meet evolving customer demand. The decline in industrial sales is largely attributable to softer demand in the materials handling market," CEO Dino Xykis said.

Power Solutions' (PSIX [https://seekingalpha.com/symbol/PSIX]) gross margin in the reported quarter stood at 23.9%, a decrease of 5.0% compared to 28.9% in the same period last year. Gross margin was impacted due to strong sales growth in comparatively lower-margin products and temporary inefficiencies related to the company's "accelerated production ramp-up."

Looking at costs, selling, general and administrative expenses were $15.3 million during the third quarter, an increase of 39% compared to the year-ago period, primarily due to higher costs associated with employee incentive programs, and expense related to customer relationship improvement efforts.

The company’s stock has climbed 173% year-to-date and is rated a strong buy by Seeking Alpha's quant ratings_. _

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* Power Solutions International: Uncertainties Await Clarity In Q3 (Rating Downgrade) [https://seekingalpha.com/article/4838483-power-solutions-international-uncertainties-await-clarity-in-q3-rating-downgrade]
* Power Solutions: AI Tailwinds Vs. Valuation Headwinds (Rating Upgrade) [https://seekingalpha.com/article/4836814-power-solutions-ai-tailwinds-vs-valuation-headwinds-upgrade-hold]
* The AI Hype Could End Early For Power Solutions International [https://seekingalpha.com/article/4834744-the-ai-hype-could-end-early-for-power-solutions-international]
* Seeking Alpha’s Quant Rating on Power Solutions [https://seekingalpha.com/symbol/PSIX/ratings/quant-ratings]
* Historical earnings data for Power Solutions [https://seekingalpha.com/symbol/PSIX/earnings]