Energy Department contractor BWX Technologies took in $501 million of revenue during the fourth quarter of 2019, a 5% uptick over $478 million a year earlier.
In addition, the Lynchburg, Va.-based company reported late Monday that revenue of nearly $1.9 billion for the 12 months ended Dec. 31 set a new record and represented a 5% increase from $1.8 billion during 2018.
Those numbers were good for $244 in net income for 2019, or $2.55 a share, beating 2018’s net income of $227 million, or $2.27 a share. Quarterly net income was $61.4 million, or $0.64 a share, up from $21.9 million, or $0.22 a share.
“We had an exceptionally strong finish to 2019 that resulted in new highs in revenue, earnings and backlog for the year,” BWXT President and CEO Rex Geveden said in the earnings press release.
Management’s focus in 2020 will be continued capitalization of its Navy franchise while ramping up production on the nuclear propulsion system for the service’s Columbia-class ballistic missile submarines.
On the other hand, Geveden said BWXT’s progress repairing bad welds on 12 missile tubes intended for the Columbia boats is “slower and more tedious than originally perceived.” The company acknowledged in 2018 that it had made bad welds on the dozen tubes, which it is building under subcontracts with Columbia prime General Dynamics Electric Boat. Geveden said about 80% of the bad welds are either fixed or “in process.”
BWXT’s Nuclear Operations Group (NOG), which produces naval nuclear reactor components and other equipment for the Navy and the National Nuclear Security Administration (NNSA), earned about $72 million for the quarter, down from $91 million for the fourth quarter of 2018. Its overall 2019 income was $298 million, compared to $271 million in 2019.
Geveden said the company is closely watching the 2021 federal appropriations process, since the White House has proposed procuring only one Virginia-class submarine instead of two. The White House wants to shift funds once intended for the Virginia program to the NNSA to give the civilian nuclear weapon steward a nearly $20 billion budget for 2021, up from just over $16.5 billion this year.
BWXT is the only supplier of nuclear naval reactors.
“If that Virginia procurement turns into one for 2021 and coupled with some other delays, it certainly puts pressure on our three- to five-year scenario. But we have to go and evaluate exactly where we are if those two things happen,” Geveden said.
If Congress appropriates money for just one Virginia-class submarine in 2021, BWXT will feel the brunt of the effects beginning that year, Geveden said.
Meanwhile, BWXT Nuclear Services Group, which includes the company’s work on management and operations contracts for Department of Energy defense-nuclear sites, reported operating income of $5.6 million for the fourth quarter. That was down from $9.2 million a year earlier, chiefly because of lower contract income, the company said this week. The segment reported full-year operating income of $14.2 million, dropping $6.1 million from 2018’s $20.3 million due in large part to contract completions.
The company’s Nuclear Power Group, which focuses on commercial business, reported $17.3 million in income for the quarter, improving on the $13.6 million reported for the last quarter of 2018. Annual income rose to $53.8 million from 2018’s $52.3 million.
BWXT earnings a share for 2020 could grow to $2.80 a share from $2.62 in 2019, the company said.
Separately, the NNSA and BWXT are still negotiating a contract that would allow the company’s Nuclear Fuel Services subsidiary to purify enriched uranium for U.S. weapons programs. The work would notionally start in the early part of this decade.
The NNSA last summer announced its intent to award a sole-source uranium purification contract to Nuclear Fuel Services. Around 2023, the agency plans to shut down existing uranium purification systems in Building 9212 at the Y-12 National Security Complex in Tennessee. NNSA plans to replace Building 9212 by December 2025 with the under-construction Uranium Processing Facility.
A Nuclear Fuel Services purification contract would give the NNSA a hedge against running out of uranium metal if there are problems making the swap on time.
