Babcock & Wilcox Q2 Profit Down 64%, Results Miss View; Lowers 2014 Outlook

(RTTNews) - Babcock & Wilcox Co. (BWC) on Wednesday reported a 64 percent decline in profit for the second quarter from last year, reflecting lower revenues and one-time costs. Both revenue and adjusted earnings per share for the quarter missed analysts' expectations.

Looking ahead to fiscal 2014, the energy technology and services provider lowered its adjusted earnings outlook as well as the top end of its revenue guidance range, citing the sharp reduction in utility spending on U.S. environmental and service projects. Shares of the company declined more than 12 percent in extended trades.

The Charlotte, North Carolina-based company's net income for the second quarter was $26.44 million or $0.24 per share, down from $72.87 million or $0.65 per share in the year-ago period.

The latest quarter's results include restructuring and acquisition-related transaction costs of $0.20 per share.

Adjusted earnings per share for the latest quarter were $0.44, compared to $0.72 per share in the year-ago period. On average, twelve analysts polled by Thomson Reuters expected the company to earn $0.49 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter declined 23 percent to $686.01 million from $886.14 million in the same period last year. Analysts had a consensus revenue estimate of $762.23 million.

Revenues in the Power Generation segment decreased 31 percent from the year-ago period to $327.4 million. The Nuclear Operations segment revenues decreased 11 percent from last year to $293.4 million, while revenues from the Nuclear Energy segment declined 29 percent to $44.9 million.

Looking ahead to fiscal 2014, Babcock & Wilcox lowered its outlook for adjusted earnings to a range of $1.70 to $1.85 per share from the prior range of $2.00 to $2.20 per share. The company also narrowed its guidance for full-year consolidated revenues to between $2.9 billion and $3.0 billion from the previous range of $2.9 billion to $3.1 billion.

Street expects the company to earn $2.12 per share for the year on revenues of $2.95 billion.

James Ferland, President and Chief Executive Officer of Babcock & Wilcox said, "While we expect to realize sequential improvement in Power Generation sales and earnings, the sharp reduction we've seen in utility spending on U.S. environmental and service projects will be difficult to overcome for the balance of the year. As a result we are revising 2014 guidance, but are confident we will produce significantly improved results in 2015."

On August 5, 2014, the company declared a quarterly cash dividend of $0.10 per common share. The dividend will be payable on September 10, 2014 to shareholders of record on August 20, 2014.

BWC closed Wednesday's trading at $30.90, down $0.11 or 0.35 percent on a volume of 1.05 million shares. In after-hours, the stock further declined $3.90 or 12.62 percent to $27.00.