Earnings rose at BWX Technologies, Lynchburg, Va., in the first quarter, during which the company said Monday it cranked out more naval-nuclear components but made less money on government business overall as it bulked up its workforce.
Work is beginning under subsidiary contracts with the Tennessee Valley Authority and the National Nuclear Security (NNSA) Administration, company executives said on the call, and so BWX Technologies (BWXT) has been hiring and training workers to downblend uranium under the Tennessee Valley Aurhotiy deal and convert and purify uranium metal under the NNSA deal.
Coupled with unrelated work on space-going nuclear power systems for other government customers, these hiring sprees and masses of new workers shrank operating profits slightly at BWXT’s flagship Government Operations segment.
“[A]ll of those businesses are just new for us… so they kind of have a lower margin,” Robb LeMasters, BWXT’s chief financial officer, said on a Monday evening call with investor analysts.
Still, profits were up overall at the company.
Net earnings for the quarter ended March 31 were $68.5 million, or $0.75 a share, up from $61 million, or $0.67 a share, in the year-ago quarter, according to a company press release. Quarterly revenue was $604 million, up year-over-year from $568 million.
BWXT predicted in its earnings call that the president’s budget request for an increase in shipbuilding and submarines will continue to increase their earnings and help them meet 2024 earnings projections of $3.05 to $3.20 per share.
Quarterly segment operating income for the Government Operations segment, which gets most of its revenue from manufacturing nuclear reactors and fuel for the US Navy’s submarines and aircraft carriers, was $85.7 million, down from $90.6 million a year ago. The segment also provides personnel for management of DOE nuclear-weapon sites.
Revenue in BWXT’s government operations segment was $487 million, up from $460 million in the year-ago period.
BWXT’s commercial operations segment, which deals with nuclear fuel and fuel-handling systems, experienced growth in operating income and revenues.