Aerospace and defense company BWX (NYSE: BWXT) reported Q2 CY2025 results exceeding the market’s revenue expectations, with sales up 12.1% year on year to $764 million. The company’s full-year revenue guidance of $3.1 billion at the midpoint came in 1.3% above analysts’ estimates. Its non-GAAP profit of $1.02 per share was 28.7% above analysts’ consensus estimates.

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“We had exceptionally strong second quarter 2025 financial results driven by solid operational performance and pacing of work, particularly in Government Operations, which was complemented by robust bookings in both segments, leading to record backlog,” said Rex D. Geveden, president and chief executive officer.

Company Overview

Contributing components and materials to the famous Manhattan Project in the 1940s, BWX (NYSE: BWXT) is a manufacturer and service provider of nuclear components and fuel for government and commercial industries.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Unfortunately, BWX’s 6.9% annualized revenue growth over the last five years was mediocre. This was below our standard for the industrials sector and is a tough starting point for our analysis.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. BWX’s annualized revenue growth of 10.9% over the last two years is above its five-year trend, suggesting its demand recently accelerated.

BWX also breaks out the revenue for its most important segments, Government Operations and Commercial Operations, which are 77.1% and 23% of revenue. Over the last two years, BWX’s Government Operations revenue (public sector sales) averaged 10.5% year-on-year growth while its Commercial Operations revenue (private sector sales) averaged 13.5% growth.

This quarter, BWX reported year-on-year revenue growth of 12.1%, and its $764 million of revenue exceeded Wall Street’s estimates by 7.2%.

Looking ahead, sell-side analysts expect revenue to grow 12.3% over the next 12 months, similar to its two-year rate. This projection is healthy and indicates its newer products and services will spur better top-line performance.

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Operating Margin

BWX has been an efficient company over the last five years. It was one of the more profitable businesses in the industrials sector, boasting an average operating margin of 15.2%.

Looking at the trend in its profitability, BWX’s operating margin decreased by 2.3 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

In Q2, BWX generated an operating margin profit margin of 13.4%, down 1.1 percentage points year on year. This reduction is quite minuscule and indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

BWX’s EPS grew at an unimpressive 4.2% compounded annual growth rate over the last five years, lower than its 6.9% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded due to non-fundamental factors such as interest expenses and taxes.

We can take a deeper look into BWX’s earnings to better understand the drivers of its performance. As we mentioned earlier, BWX’s operating margin declined by 2.3 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For BWX, its two-year annual EPS growth of 11.3% was higher than its five-year trend. This acceleration made it one of the faster-growing industrials companies in recent history.

In Q2, BWX reported adjusted EPS at $1.02, up from $0.82 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects BWX’s full-year EPS of $3.68 to stay about the same.

Key Takeaways from BWX’s Q2 Results

We were impressed by how significantly BWX blew past analysts’ revenue and EPS expectations this quarter. We were also excited its full-year guidance was raised from previously-provided ranges. Zooming out, we think this quarter featured some important positives with little to complain about. The stock traded up 9.2% to $168.60 immediately after reporting.

Sure, BWX had a solid quarter, but if we look at the bigger picture, is this stock a buy? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.