PRISM Company Spotlight: Babcock & Wilcox to Implement Strategic Realignment
Energy and environmental products and services provider, Babcock & Wilcox (NYSE: BW) is trading up 16.55% on Friday afternoon, with more than 800,000 shares changing hands during the day’s trading. On November 10, 2023, Craig-Hallum downgraded their outlook for B&W from Buy to Hold, with analysts forecasting revenues of $979 million in 2024, implying a 6.8% decline in sales compared to the previous 12 months.
This move came in spite of the company being awarded two separate contracts valued at $11 million each: the first anenvironmental equipment contract to supply two replacement wet electrostatic precipitators at two U.S. industrial facilities and rebuild a wet ESP for a third facility, and the second, a multi-year utility plant maintenance contract from a Canadian Thermal Generating Station.
Strategic Business Realignment
In November, B&W reported its financial results for the third quarter of 2023, announcing plans for a strategic business realignment focused on higher margin aftermarket businesses and more predictable cash flows to improve the balance sheet and better position the company for future growth in BrightLoop™ and ClimateBright™. B&W said it expected annualized cost savings of over $30 million to result from the realignment and the considering of strategic alternatives regarding non-strategic assets.
Additionally, B&W reported revenues of $239.4 million in Q3 2023, a 13% improvement year-over-year, and net loss of $12.3 million, compared to a net loss of $12.8 million in the third quarter of 2022.
Insider Holdings
Last month, the company’s management showed confidence in its performance and direction with Louis Salamone, B&W’s Chief Financial Officer investing $57,000 in company stock, at US$1.15 per share, increasing his shareholding by 8.6%. In the last 12 months, insider Bryant Riley made the biggest insider stock purchase in a single transaction valued at $578,000 at a price of US$5.83 each. According to Simply Wall St, insiders own 4.7% of B&W, worth about US$6.3m.
Strengthened Management
Also in November, B&W appointed Dr. Naomi Boness to its Board of Directors, increasing the size of the Board to seven members. Dr. Boness is the Managing Director of the Natural Gas Initiative at Stanford University, Co-Managing Director of the Stanford Hydrogen Initiative and an experienced energy sector expert.
B&W Chairman and Chief Executive Officer Kenneth Young said of Dr. Boness’ appointment, “Dr. Boness has extensive technical acumen and knowledge of the field of hydrogen generation and her addition to B&W’s Board of Directors reinforces the critical role we anticipate hydrogen will play in B&W’s business in the coming years.”
About Babcock & Wilcox
Headquartered in Akron, Ohio, Babcock & Wilcox Enterprises, Inc. is a leader in energy and environmental products and services for power and industrial markets worldwide. Follow us on LinkedIn and learn more at babcock.com.
