BWXT Q3 Revenue Rises 10%, Preliminary 2027 Outlook Signals Earnings Growth

BWX Technologies Inc. reported double-digit third-quarter revenue growth and a sharper increase in adjusted earnings, supported by gains in both operating segments and stronger cash generation. The nuclear technology company also tightened its 2026 guidance ranges and issued a preliminary 2027 outlook calling for high-single-digit to low-double-digit growth in adjusted EBITDA and non-GAAP earnings per share.

Revenue for the quarter ended Sept. 30 rose 10% year over year to $953 million, including 7% organic growth. Adjusted EBITDA increased 19% to $179.8 million, while the adjusted EBITDA margin expanded 150 basis points to 18.9%.

GAAP net income increased to $102 million from $82.2 million a year earlier, and GAAP diluted earnings per share rose to $1.11 from $0.89. Non-GAAP EPS advanced 26% to $1.26, reflecting higher operating income, lower net interest expense and a lower tax rate, partly offset by lower pension and other income and foreign-exchange losses.

Operating cash flow climbed 42% to $202.7 million, helped by higher net income, increased advance billings and working-capital management. Free cash flow rose 59% to $150.5 million after $52.3 million of capital expenditures.

Government and commercial businesses both expand

Government Operations revenue increased 4% to $639 million. Growth in special materials and advanced nuclear programs more than offset lower naval propulsion materials procurement. Segment adjusted EBITDA rose 22% to $144.2 million, with the margin increasing to 22.6% from 19.2%, as BWXT cited higher revenue and strong operating performance across its business lines.

Commercial Operations revenue grew 25% to $314 million, including 15% organic growth. The increase reflected higher activity in commercial nuclear power components, services and medical products, along with a contribution from the Precision Components Group acquisition. Slightly lower fuel-handling revenue provided a partial offset.

Commercial Operations adjusted EBITDA increased 17% to $41.4 million. Its adjusted EBITDA margin declined to 13.2% from 14.2% as product and service mix and selling, general and administrative investment to support growth offset part of the benefit from higher revenue.

BWXT said it closed the acquisition of Precision Components Group during the period, establishing a U.S. commercial nuclear manufacturing presence. The company also received a $189 million contract to manufacture naval nuclear reactor fuel. Its BANR microreactor technology was selected for the U.S. Army’s Janus Program and for Prodigy Clean Energy’s transportable nuclear power plant project in Canada.

2026 guidance narrowed; preliminary 2027 outlook issued

BWXT now expects approximately $3.8 billion of revenue and about $667 million of adjusted EBITDA for 2026. The company set a non-GAAP EPS range of $4.72 to $4.77 and projected free cash flow of $350 million to $360 million.

Government Operations revenue is expected to grow at a high-single-digit rate, driven mainly by new special materials programs and modest naval propulsion growth. Commercial Operations revenue is projected to increase about 45%, including mid-to-high-teens organic growth and contributions from Kinectrics and Precision Components Group.

The company expects a Government Operations margin above 20.5% and a Commercial Operations margin of about 13%. Capital expenditures are forecast at approximately 6% of sales, while operating cash flow is expected to rise in the high-teens to low-20% range from 2025.

For 2027, BWXT preliminarily projects high-single-digit revenue growth. Government Operations revenue is expected to increase at a high-single-digit to low-double-digit rate, supported by naval propulsion, special materials and advanced nuclear work. Commercial Operations revenue is forecast to grow in the low single digits, as high-single-digit organic growth and the Precision Components Group contribution are partly offset by the planned sale of the Medical business. The outlook assumes that transaction closes at the end of 2026.

Adjusted EBITDA and non-GAAP EPS are each expected to grow at a high-single-digit to low-double-digit rate in 2027, based on the midpoint of the 2026 guidance. Free cash flow is projected to be flat to slightly higher, with profit growth partly absorbed by near-term working-capital investment. Capital spending is again expected to equal about 6% of sales.

BWXT cautioned that the outlook remains subject to federal budget uncertainty, changing government funding and acquisition priorities, contract award and approval timing, supply-chain or operating disruptions, labor-market challenges, project execution risks and changes in utility capital spending. Technology development, regulatory approvals and the timing of new nuclear programs also could cause actual results to differ from management’s expectations.