Earnings fell at BWX Technologies, Lynchburg, Va., in the second quarter, which the Department of Energy contractor and maker of nuclear submarine reactors and components attributed to non-recurring costs such as commercializing a line of medical isotopes, plus higher interest rates.
Net income for the second quarter ended June 30 was $59.4 million or $0.62 per share down from $64.4 million or $0.71 per share during the same period in 2020, according to an earnings report issued Tuesday after the markets closed.
At the same time, revenue remained flat at $505 million, as higher Nuclear Power Group revenue offset lower intake from the Nuclear Operating Group, which includes the naval business, as well as the Nuclear Services Group, which quarterbacks business managing DOE nuclear sites.
Nuclear Power Group revenue swelled to $102 million from $68 million quarter-over-quarter, while the Nuclear Operating Group took in only $381 million rather than the $410 million from a year ago. Revenue at the Nuclear Services Group dipped to $30 million from $33 million.
“On the Nuclear Services side we await new awards that should occur later this year including the Pantex and Y-12 management and operations contract and the Savannah River Integrated Mission Cleanup Contract,” BWXT President and CEO Rex Geveden said during the earnings conference call, referring to pending multibillion-dollar DOE business awards in Tennessee and South Carolina.
“Should we prove successful on some of these, the Nuclear Services segment would see significant income growth in the near and medium term with the objective to grow that segment back to its historical prominence,” Geveden said.
BWXT still expects its 2021 annual earnings to be in the range of $3.05 to $3.20 per share, according to Monday’s earnings press release.
Canadian COVID-19 Economic Response Plan payments helped offset some incurred expenses related to the pandemic, the Geveden said.
“We saw COVID absences impact us earlier this year,” and that put the company a bit behind on production timelines, Geveden said during the earnings call. “The good news is these bottlenecks are improving.”
The BWXT CEO went on to say the company is hiring at several of its operations, but is not overly concerned about labor shortages. “We are somewhat concerned about what we hear about the labor market,” Geveden said. In Lynchburg, Va., and some of the other communities where the company has operations, “we tend to be an employer of choice. … “we tend to get high-quality applicants,” Geveden said.
