Earnings rose significantly at BWX Technologies (BWXT), Lynchburg, Va., in the third quarter, which the company attributed to its “differentiating nuclear credentials” and some multi-year, special materials contracts it received.
“The demand environment for nuclear solutions in defense, clean energy, and medical markets is unprecedented,” Rex Geveden, president and CEO of BWXT, said in the company’s earnings release published after the market closed Monday. “With that demand, we are seeing new opportunities across the market spectrum for BWXT.”
Net earnings for the third quarter ended Sept. 30 were $82.2 million, or $0.89 a share, up from $69.6 million, or $0.76 a share, in the year-ago quarter. Quarterly revenue was $866.3 million, up year-over-year from $672 million.
Quarterly segment operating income for government operations was $97.4 million, down from $101.6 million a year ago, which the company attributed to a “lower level of favorable contract adjustments” compared to the same period last year. However, segment revenue was $616.7 million, up from $560.1 million in the year-ago period, which the officials on the earnings call said were driven by the performance in “naval propulsion and higher technical services equity income.”
On an earnings call with Wall Street analysts Monday, BWXT shouted out two contracts with the National Nuclear Security Administration (NNSA) as fuel for its strong quarter: one worth $1.5 billion to design NNSA’s Domestic Uranium Enrichment Centrifuge Experiment (DUECE) pilot plant in Tennessee, and one tasking BWXT with licensing, design and operation of High Purity Depleted Uranium production in Tennessee. Geveden said this venture will generate 300 metric tons of high purity uranium per year for NNSA, and both ventures were a “demonstration of trust our customers put into BWXT” for “mission critical national security programs.”
Geveden and Chase Jacobson, vice president of Investor Relations and Strategic Finance, also discussed the Janus program the Secretaries of the Army and Energy announced in October. Project Janus would involve the DoD and national labs deploying commercially owned and operated microreactors in the military by Sept. 2028, and would be “building on Project PELE,” a similar microreactor project that BWXT is involved in.
Geveden said BWXT’s qualifications should be a difference maker for JANUS and that the company will “intend to compete for the Janus program.”
When asked by analysts about the impact of the government shutdown, Geveden said it mainly affected “technical services within government operations” at DOE sites. However, Geveden said all ventures were “fully operational still at this point,” but “we have not contemplated a long term shutdown in our guidance.”
BWXT’s fuel and reactors power the U.S. Navy’s Ohio-, Virginia-, and Columbia-class submarines, all of which will carry warheads developed by the National Nuclear Security Administration (NNSA).
BWXT is involved in major joint ventures across the DOE weapons complex, and is lead partner on liquid waste management contracts at the Hanford Site in Washington state and the Savannah River Site in South Carolina.