Lynchburg, Va.-based BWX Technologies [BWXT] hauled in $520 million in revenue during the third quarter, which ended Sept. 30, which is up 3% from the $506 million it took in during the same period a year ago, according to a Monday earnings release.
Its net income for the quarter dipped a bit, however, as BWXT took in $73.2 million, or $0.76 per share, compared with $74.8 million, or $0.78 per diluted share, in the same period in 2019.
Despite the COVID-19 pandemic, “BWXT delivered solid results in the third quarter, exhibiting consistent underlying business performance across all segments and indicating the stability of our end markets even under challenging economic conditions,” said the company’s president and CEO Rex Geveden in the release.
As a result, BWXT increased its estimated earnings per share guidance, from $2.80 to a range of between $2.90 and $3.00 for 2020. That is based on non-generally accepted accounting procedures, according to the release.
Revenues and operating incomes were up or flat for two of the company’s three nuclear business lines. The flagship Nuclear Operations Group, which includes BWXT’s naval business and uranium downblending work for the Department of Energy’s National Nuclear Security Administration (NNSA), suffered lower numbers for both revenue and income. Revenue dropped from $394 million to less than $387 million. Segment operating income was down from about $94 million to $68 million.
Still, the company said the segment should see revenue improvement for the year on higher production associated with the Columbia-class ballistic-missile submarine program. BWXT makes heavy reactor components for nuclear warships and submarines, including Ford carriers and Virginia submarines.
“Over the next few months,” Nuclear Operations should finish contract negotiations with the Navy for Columbia-class propulsion systems in 2021 and 2022, Geveden said on the conference call.
Meanwhile, the Nuclear Services Group, which includes the company’s contracts with the Department of Energy Office of Environmental Management, was basically flat on the revenue side, coming in at about $500,000 more than a year ago: a little under $34 million, in both quarters. The segment’s operating income rose from $5.5 million to $7.5 million.
Last, revenue at BWXT Nuclear Power Group, the commercial side of the house, increased from $84 million to $108 million year over year, while its operating income increased from $9 million to $29 million in the most recent quarter. The Nuclear Power Group benefited from COVID-19 economic relief in Canada, according to the release.
Meanwhile, Geveden said BWXT is very interested in pursuing the National Nuclear Security Administration’s (NNSA) potentially $28-billion, 10-year management and operations contract for the Pantex Plant in Amarillo, Texas and the Y-12 National Security Complex in Oak Ridge, Tenn.
“We are not presently incumbent” but have a history with the sites, the CEO said. BWXT ran Y-12 and Pantex for most of the years since Congress created the NNSA in 2000. The separate Pantex and Y-12 management and operations contracts the company received in 2000 ended in 2014. NNSA has since combined management of the sites under a single contract.
At Y-12, the NNSA makes nuclear-weapon secondary stages and prepares highly enriched uranium for processing into naval nuclear fuel at commercial facilities not far from the Oak Ridge, Tenn., site. Pantex assembles and services nuclear weapons.
A source has said BWXT is teaming with Huntington Ingalls Industries [HII] and Honeywell [HON] to bid on the joint site management and operations contract, which could be worth $28 billion over 10 years.