What Happened?
Shares of aerospace and defense company BWX (NYSE: BWXT) jumped 18.1% in the afternoon session after the company posted strong second-quarter results and raised its full-year financial outlook. The nuclear components supplier announced adjusted earnings of $1.02 per share on revenue of $764 million, figures that comfortably topped Wall Street estimates. This performance stemmed from solid work in its government operations and a 24% revenue increase in its commercial business. The company also boosted its full-year guidance and reported a record $6 billion backlog, a 70% increase year-over-year, which was bolstered by a new pricing agreement for over $1 billion in U.S. naval reactor work.
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What Is The Market Telling Us
BWX’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. Moves this big are rare for BWX and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 19 days ago when the stock gained 3.7% on the news that the company announced a U.S. Naval Nuclear Propulsion Program contracts valued at approximately $2.6 billion.
The contracts, which include future year options, are for the manufacturing of naval nuclear reactor components. This work will primarily support the U.S. Navy's Virginia and Columbia-class submarines, which are key elements of the nation's defense infrastructure, as well as some components for Ford-class aircraft carriers. A naval nuclear reactor is a complex system requiring large, heavy components and finely machined parts. BWXT will manufacture and assemble these critical parts over the next six to eight years across its facilities in Ohio, Indiana, Tennessee, and Virginia. This significant award builds upon $2.1 billion in contracts announced in February and reinforces the company's long-standing relationship of over 70 years with the U.S. Navy.
BWX is up 65.3% since the beginning of the year, and at $184.28 per share, has set a new 52-week high. Investors who bought $1,000 worth of BWX’s shares 5 years ago would now be looking at an investment worth $3,173.
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