Babcock & Wilcox 3rd-Quarter Profit Down 3.9%; Initiates Dividend

   By Debbie Cai 
 

Babcock & Wilcox Co.'s (BWC) third-quarter earnings slipped 3.9% as the power-plant technology company recorded investment-related impairment charges.

The company, which spun off from McDermott International Inc. (MDR) in 2010, had previously posted a string of earnings growth.

Analysts from Citigroup Inc. (C) said at the end of September that Babcock & Wilcox was competitively well positioned in all its segments and end markets, and among other things was poised to benefit from environmental-controls spending.

It also initiated a quarterly dividend of eight cents a share and a $250 million share repurchase program.

The company said it unveiled a pension-plan freeze after 2015 for salaried participants and will significantly lower pension contributions over the next couple of years.

Babcock & Wilcox reported a profit of $38.3 million, or 34 cents a share, down from $39.9 million, or 39 cents a share, a year earlier. Excluding $25.3 million of previously unrecognized tax benefits and $28.6 million of non-cash impairment charges related to USEC Inc. preferred stock, earnings were down at 37 cents from 39 cents.

Revenue grew 14% to $807.6 million as power generation segment revenue rose 11% to $426.4 million, offsetting a decline in its technical services segment.

Analysts polled by Thomson Reuters most recently projected earnings of 44 cents on revenue of $830 million.

As of Sept. 30, backlog was $5.44 billion, up 17% from a year earlier.

Shares closed Wednesday at $26.25 and were unchanged after hours. The stock was up 16% over the past 12 months.

Write to Debbie Cai at [e-mail]

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