The shares of engineering firm The Babcock & Wilcox Company (BWC) soared to a 52-week high of $30.23 on Tuesday, May 28, 2013, buoyed by a slew of positive developments. The closing price of the company as of the said date was $29.95, representing an impressive 1-year return of 20.67%. Additionally, Babcock & Wilcox – with a market cap of $3.36 billion – boasts of a long-term expected earnings growth rate of 13.50%.
Earlier this month, Babcock & Wilcox reported first quarter 2013 adjusted earnings per share of 46 cents, below the year-ago adjusted earnings of 50 cents. But its revenue improved 5.2% from the year-earlier level to 805.4 million. This was aided by strong performance by the Power Generation segment.
Last week, Babcock & Wilcox won a U.S. Naval Reactors Program contract to render procurement and assembling services. The company will execute the deal, worth $366 million, through its affiliate Babcock & Wilcox Nuclear Operations Group Inc.
Earlier in Feb, Babcock & Wilcox received two contracts worth $36 million, also from U.S. Naval Reactors Program to render procurement and assembling services.
With the success of the past contracts, Babcock & Wilcox is on an expansion path. It looks forward to more such opportunistic programs in 2013 to gain a significant market share. We believe such accomplishments will garner profits for Babcock & Wilcox in the upcoming quarters.
Headquartered in Charlotte, N.C., Babcock & Wilcox is engaged in providing clean energy technology and services for the nuclear, fossil and renewable power markets worldwide. The company – which was spun off as an independent and publicly traded entity from energy-focused engineering and construction firm McDermott International (MDR) in Aug 2010 – operates in four business units: Power Generation, Nuclear Operations, Technical Services and Nuclear Energy.
Babcock & Wilcox currently carries a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.
However, certain other engineering firms in the energy sector like Tri-Tech Holding Inc. (TRIT) and Graco Inc. (GGG) are expected to outperform the equity market in the next one to three months. Both the stocks currently hold a Zacks Rank #1 (Strong Buy).
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