Although the Department of Energy has put the award on hold, BWX Technologies President and CEO Rex Geveden likes his company’s chances of retaining the potential $13-billion Tank Closure Contract at the Hanford Site in Washington state.
“We feel good about our prospects there,” Geveden said during the Lynchburg, Va.-based company’s third-quarter earnings call Monday with Wall Street analysts. “We wrote a winning proposal, obviously, and we’re standing by for that outcome, and that’s up to the DOE so I won’t make further comment on that.”
The DOE Office of Environmental Management put the brakes on the contract award in July to BWX Technologies-led Hanford Works Restoration after competing bidders filed challenges with the Government Accountability Office. Procurement officials at DOE’s nuclear cleanup office are deciding whether to go ahead with the award.
Geveden said DOE could announce its decision “hopefully in the near future.”
Meanwhile, Gevenden said BWX Technologies (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.
Another target is the DOE Environmental Management Office’s next liquid waste management contract at the Savannah River Site in Aiken, S.C. BWXT is a minority partner in the Amentum-led incumbent, Savannah River Remediation. BWXT is also looking at the next Environmental Management cleanup contracts at the Oak Ridge Site in Tennessee and the Idaho National Laboratory, Geveden said. BWXT has done waste treatment work at Idaho in the past, the CEO added.
BWX Technologies 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,” Geveden said in the release.
As a result, BWXT increased its estimated earnings per share guidance, from $2.80 to about $3.00 for 2020.
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 National Nuclear Security Administration, 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.
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.
On another front, Geveden said the fallout in the company’s medical isotopes business could be turning around. Operating income for the business declined more than 25% in the second quarter as patients put off most elective medical procedures due to concerns about contracting the coronavirus, he said.
