Earnings rose at BWX Technologies, Lynchburg, Va., in the second quarter, which the company on Monday attributed partly to organic growth in government operations as it prepared to begin work on a new nuclear weapons contract.
In June, the National Nuclear Security Administration (NNSA) awarded PanTeXas Deterrence, a BWX Technologies (BWXT)-led joint venture, a contract to manage the Pantex Plant in Amarillo, Texas. With options, the deal is worth $30 billion over 20 years.
On an earnings call Monday with investor analysts, Chase Jacobson, BWX Technologies’ (BWXT) vice president of investor relations, said the July 13 “quick transition” onto the Pantex contract is “further solidifying [BWXT’s] leadership in the NNSA space.”
BWXT’s net earnings for the second quarter were $73 million, or $0.79 a share, up from $59 million, or $0.64 a share, in the year-ago quarter. Quarterly revenue was $681.5 million, up year-over-year from $612.5 million.
Quarterly segment operating income for the government operations segment, which handles government contracting NNSA and other Department of Energy sites, was $93 million, up from $82 million a year ago. Segment revenue was $541 million, up from $492 million in the year-ago period.
Jacobson acknowledged that investments the company has had to make in growth and capital — which led to an 18% decrease in operating cash flow and a 24% decrease in capital expenditures, respectively — would cause “headwinds,” but that he predicted these would be short-term.
“In recent months there have been multiple important developments supporting our nuclear markets, including passage of the ADVANCE Act, federal and state legislation supporting small modular reactor development and the Army and Defense Innovation Unit’s acquisition plans for microreactors at remote military bases, all of which have been complemented by broad-based support from private industry,” Rex Geveden, CEO of BWXT, said in an earnings news release. “These developments demonstrate the increasing appetite for nuclear solutions across the global security, clean energy, and medical markets, ultimately driving new and exciting opportunities for BWXT.”
Meanwhile, media outlets such as Associated Press reported historic market lows Monday, when the earnings call took place. The S&P 500 index, the broad U.S. market measure, dropped about 3% as fear over the economy expedited losses on Wall Street, and BWXT shares dropped about or 2.13% to $92.38 by the end of the trading day. That is $14.80 down from its 2024 high-water mark.
BWXT has a virtual monopoly on the naval-nuclear reactors used in U.S. naval warships and submarines, including the Virginia-class submarines that will be sold to Australia as part of the trilateral AUKUS deal among Australia, the U.K. and the U.S.
When an investor analyst on the call asked about the schedule for AUKUS, Jacobson said the company did not have any visibility into the program, but that the three to five submarines Australia asked for would provide work for BWXT over the next decade.
