BWX Technologies (NYSE:BWXT) stock surged over 2.7% on May 7th, 2018 (as of 2:41 PM GMT-4; Source: Google finance). For the first quarter of 2018, the Operating income rose 68% to $21.8 million as compared to the pcp boosted by a favorable mix as well as some items that were accelerated into the first quarter. Segment backlog rose to $550 million. The group even won a CAD $642 million contract from Bruce Power for steam generators and drums, leading to an incremental adjustment of more than CAD $460 million from the original contract received in 2016.
Their bottom line, Non-GAAP earnings per share rose 22% yoy to $0.67, along with 7% revenue rise boosted by record results in the nuclear power group. Bookings were light for the quarter, related entirely to timing. The group intends to continue to consume some backlog as they approach to the next multi-year pricing agreement with the Navy early next year.
For 2018, they reiterated the guidance with earnings per share expected to be in the range of $2.45 to $2.55, while the overall company revenue is in the range of $1.75 billion to $1.85 billion. They also reiterated their long-term low double-digit earnings per share guidance over the three to five-year period following 2017. The group forecasts an NOG revenue of $1.3 billion to $1.4 billion while margins are expected to be in the high teens, with upside potential from pension reimbursements; NPG revenue is also expected to be in the range of $300 million to $350 million and margins of over 12%.
Budget caps were raised for 2018 as well as 2019 while Congress offered debt ceiling giving relief to the group until March of next year. The President’s 2019 budget sets up a positive trend line for the ongoing growth, offering their customers with much needed funding stability in the near term. The group sees that a dependable North American-based supply of moly-99 would enhance their confidence and availability and in turn drive clinical demand and accelerate growth in the market which is currently seeing mid-single digit annual gains. They intend to enter the market through generator sales to radiopharmacies, which they expect to be more than $400 million globally. Their initial focus would be on the North American market, while the group expects having sufficient production capacity to satisfy all of the current North American demand for moly-99.