If it holds up under protest, the $4.7 billion contract for liquid waste management at the Department of Energy’s Savannah River Site in South Carolina will provide BWX Technologies with one of its bigger wins as a prime contractor in recent years, executives said during a quarterly call on Tuesday. But management said it would not sit idle on future DOE contracts.
BWXT leads the Savannah River EcoManagement joint venture, with partners Bechtel National and Honeywell International, that on Oct. 12 won the deal to take over management of about 35 million gallons of Cold War-era waste stored at Savannah River. The losing bidding teams, one led by AECOM and the other by Fluor, filed contract protests with the Government Accountability Office on Oct. 31.
“It is the first large prime position for BWXT in the technical services space since the since Pantex-Y-12 contract at the turn of the millennium,” BWXT President and CEO Rex Geveden said during the earnings call with financial analysts.
A BWXT subsidiary managed the Pantex Plant in Texas and Y-12 National Security Complex in Tennessee for DOE’s semiautonomous National Nuclear Security Administration (NNSA) from about 2001 to 2014. The contracts were managed under the Babcock & Wilcox name, which after a 2015 corporate spinoff is the name of the departed power generation-related business.
During the call, Geveden was also asked about other business BWXT is pursuing across the DOE complex.
“We do have a number of opportunities in the pipeline, we talked about some of those at the investor day [in October], certainly the Savannah River management and operations contract is one that we are looking at,” he said.
The management contract awarded in 2007 to the Fluor-Honeywell-Stoller Newport News Nuclear joint venture Savannah River Nuclear Solutions is set to expire on July 31, 2018. It covers management of the Savannah River Nuclear Laboratory and other operations at the South Carolina facility.
Geveden also cited the Los Alamos National Laboratory management and operations contract as a possibility. The NNSA in late October released the request for proposals for the contract worth about $2 billion per year for up to a decade. BWXT is one of the partners in Los Alamos National Security, current prime at the New Mexico nuclear weapons lab.
“There is Hanford work out there,” the CEO added. “We are generally in the competitive mix on most of the stuff that’s in that pipeline,” Geveden said.
In an earnings release Monday, BWXT reported third-quarter 2017 revenue of $419 million, a 10.5 percent increase from $380 million in the third quarter of 2016. The company’s total costs and expenses were $349.3 million, compared to $322.1 million in the third quarter of 2016.
Net income of $46.6 million rose from $41.1 million in the third quarter of 2016. Earnings per share for the quarter that ended Sept. 30 came in at $0.46, a 17.9 percent uptick from $0.39 in 2016.
BWXT’s Nuclear Services Group segment, which includes its DOE and NNSA business, reported $27.5 million in third-quarter revenue, which compares to $28.76 million in revenue for the third quarter of 2016. Year-to-date, the segment’s revenue has increased 5.4 percent to roughly $100.15 million compared to the $94.98 million from the first nine months of 2016. The Nuclear Services business secured $1 billion in contracts during the quarter.
BWXT also narrowed its full-year, company-wide guidance from the prior range of $1.97 to $2.07 in earnings per share to between $2.01 and $2.07 per share. Management did not list any reason for the guidance adjustment.
