BWX Raises Outlook as Commercial Growth Slows
The company lifted its 2026 free-cash-flow forecast to $345 million to $360 million.
The nuclear-technology supplier BWX Technologies Inc. (BWXT) reported an 18% increase in second-quarter revenue to $901.6 million, as its commercial business supplied most of the growth.
The pace slowed from 26% in the first quarter and 29% in the third quarter of 2024, even as revenue increased 4.8% sequentially. Commercial Operations remained the primary growth engine, while Government Operations expanded at a low-single-digit rate.
GAAP net income rose 14% from a year earlier to $89.1 million, and diluted earnings increased 14% to $0.97 a share. Both measures declined from the first quarter despite higher revenue and adjusted earnings before interest, taxes, depreciation and amortization. Adjusted earnings slipped sequentially to $1.07 a share, with year-over-year growth slowing to 5% from 22% in the prior quarter.
Commercial Operations revenue jumped 72% to $302.5 million and accounted for $126.4 million of the company's $137.6 million consolidated revenue increase. That growth moderated from 121% in the first quarter. Sequentially, the segment's revenue rose 6.7%, while operating income increased 1.3%, narrowing its operating margin to about 8.0% from 8.5%.
Government Operations revenue rose 2% from a year earlier to $601.3 million. Operating income fell 3% and adjusted EBITDA declined 5% due to fewer favorable contract adjustments and a less favorable mix. Sequentially, the segment's operating income increased 6.7% on 4.0% revenue growth.
Those segment trends weighed on consolidated profitability. Operating income rose 11% to $114.1 million, trailing revenue growth, while the GAAP operating margin narrowed to about 12.7% from 13.4% a year earlier. Adjusted EBITDA increased 7% to $155.5 million, down from 14% growth in the first quarter, and its margin contracted to about 17.2%.
Backlog climbed about 40% to $8.40 billion, led by Government Operations, despite quarterly bookings falling about 60% to $648.9 million. First-half bookings remained 23% above the year-earlier period at $2.90 billion.
BWX now expects 2024 adjusted EBITDA of $662 million to $672 million and non-GAAP earnings of $4.70 to $4.80 a share, marking its second outlook increase this year. Revenue guidance is about $3.8 billion. The forecast includes PCG, which BWX acquired July 1 to add U.S. commercial-nuclear component manufacturing capacity, while the company also announced plans to sell its medical business.