Babcock & Wilcox Enterprises Inc. (NYSE: BW)’s 1Q EPS Beats


Babcock & Wilcox Enterprises Inc (NYSE: BW) fared well in 1Q2016 with both the top and bottom line numbers exceeding expectations and management guiding positively for full-year 2016. Babcock & Wilcox Enterprises Inc (NYSE: BW) can be seen trying to break its dependence on coal plants so that it can focus more on manufacturing and service.

What transpired in 1Q2016?

Babcock & Wilcox Enterprises Inc (NYSE: BW) posted EPS of $0.27, up from $0.26 in the corresponding quarter a year earlier and strongly above the consensus estimate of $0.25. Revenue of $404.1 million rose 1.7% YoY.

What about full-year 2016?

Babcock is looking forward to a strong 2016 with EPS guided in the range of $1.25 to $1.45.

$80 million Philippines contract Babcock & Wilcox Enterprises Inc (NYSE :BW)

Babcock & Wilcox Enterprises Inc (NYSE:BW)’s beating 1Q2016 earnings come after the company recently disclosed signing a coal-themed contract in the Philippines valued at more than $80 million. The contract involves designing an advanced coal-powered boiler. The client is Masinloc Power Partners Co., which is a subsidiary of the U.S. power company called AES Corp (NYSE: AES).

The boiler that Babcock has been tapped to provide will be used as part of Masinloc’s capacity expansion.

Looking beyond traditional markets

According to Babcock’s CEO, Jim Ferland, the company is looking for new growth opportunities and they are casting their net beyond the traditional markets of the U.S. and Europe. In the hunt for new growth, it turns Babcock is paying special attention to developing economies, especially those in Asia where growth in the energy sector has been robust in the recent years.

Squeezing the juice from fossil while it still exists

The recently signed Paris climate deal commits countries to convert to renewable energy sources such as wind and solar. Babcock & Wilcox Enterprises Inc (NYSE: BW) is aware of where the future of global energy is moving given the growing concerns regarding global warming and the company has done its job to have a footprint in the renewable energy economy. However, the company is also maintaining a presence in the fossil fuel industry to apparently continue squeezing the juice as long as the market exists.


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