BWX's third quarter was marked by robust revenue growth and exceeded Wall Street’s expectations, yet the market reacted negatively as investors weighed the company’s lower operating margin and cautious guidance. Management pointed to significant contributions from both government and commercial operations, highlighting strong execution in new national security contracts and rapid growth in the commercial nuclear and medical isotope businesses. CFO Michael Fitzgerald noted, “Seasonality in large material procurements shifted some revenue forward, resulting in a larger than expected beat this quarter, but also implies a weaker fourth quarter.”
Is now the time to buy BWXT? Find out in our full research report (it’s free for active Edge members).
BWX (BWXT) Q3 CY2025 Highlights:
- Revenue: $866.3 million vs analyst estimates of $793.5 million (28.9% year-on-year growth, 9.2% beat)
- Adjusted EPS: $1 vs analyst estimates of $0.86 (16.5% beat)
- Adjusted EBITDA: $151.1 million vs analyst estimates of $141 million (17.4% margin, 7.1% beat)
- The company reconfirmed its revenue guidance for the full year of $3.1 billion at the midpoint
- Management raised its full-year Adjusted EPS guidance to $3.78 at the midpoint, a 2% increase
- EBITDA guidance for the full year is $570 million at the midpoint, in line with analyst expectations
- Operating Margin: 13.1%, down from 14.4% in the same quarter last year
- Backlog: $7.4 billion at quarter end
- Market Capitalization: $17.7 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From BWX’s Q3 Earnings Call
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Peter Skibitski (Alembic Global): Asked about the revenue recognition timing of new defense contracts and the reasons for a lower implied fourth quarter. CFO Michael Fitzgerald clarified that revenue from new contracts was minimal in the quarter, and early material procurement shifted some expected Q4 revenue into Q3 due to seasonality.
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Will Gildea (CJS Securities): Asked about Kinectrics acquisition performance and new market opportunities. CEO Rex Geveden highlighted strong outperformance in transmission, distribution, and offshore wind cable testing, with additional synergy in medical isotopes and licensing support for Canadian utilities.
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Peter Arment (Baird): Questioned the revenue cadence and margin impact from large defense contracts. Fitzgerald noted that revenue will be distributed over 10-15 years with early-stage lower margins, improving as operational performance ramps up.
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Jeffrey Grampp (Northland Securities): Inquired about key risks to the 2026 outlook and the impact of a potential government shutdown. Fitzgerald responded that risks include the timing of commercial nuclear orders, defense spending stability, and prolonged government shutdowns, particularly affecting technical services.
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Michael Ciarmoli (Truist Securities): Asked for updates on the naval propulsion segment and AUKUS program capacity needs. Geveden reported positive trends in shipyard activity, ongoing capacity expansion, and continued investment to support anticipated AUKUS demand.
Catalysts in Upcoming Quarters
In the next few quarters, the StockStory team will focus on (1) the pace of ramp-up and margin improvement in the newly awarded defense contracts, (2) the volume and timing of new commercial nuclear order announcements, especially in SMRs and large reactors, and (3) the operational integration and performance of the Kinectrics and AOT acquisitions. Continued growth in medical isotope production and expansion into new geographies will also be important markers for sustained commercial momentum.
BWX currently trades at $189, down from $215.99 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free for active Edge members).
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