North Queensland Cowboys beat second-placed Penrith Panthers 26-20 and South Sydney Rabbitohs consigned Newcastle Knights to a first home loss of the season in the NRL on Friday.

The Cowboys were languishing second bottom of the ladder when they kicked off at Carrington Park, but claimed a much-needed victory after dominating the first half.

Michael Morgan and Ben Hampton darted over in the space of five minutes, then Johnathan Thurston laid on the third try for Gavin Cooper with the Panthers under the cosh.

Isaah Yeo produced an incredible pass for Tyrone Phillips, who finished clinically to get the Panthers on the board and make it 20-4 at the break. 

Penrith were only four points adrift following a quickfire first career double from captain Peter Wallace, but Thurston was on hand to dot down when the home side failed to deal with a high ball and he completed the scoring with a penalty after Phillips claimed his second try of the night.

Thurston finished with a 14-point haul in what was the only the Cowboys' third win of the campaign. 

The Bunnies moved up to fifth in the ladder with a 36-18 victory at McDonald Jones Stadium, but it could have been a different story had Ken Sio not spilled the ball as he dived to touch down after going over in the early second half.

A Sio try would have brought the Knights level and he had another moment to forget moments later, making a mess of a high ball to enable Dane Gagai to score against his former club. 

Robert Jennings and Cody Walker had got Souths off to a flyer with early tries, while Campbell Graham, the excellent Damien Cook and Greg Inglis also crossed as Shaun Kenny-Dowall's double went without reward.