Why Babcock & Wilcox Shares Jumped


Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of The Babcock & Wilcox Company jumped as much as 14% today after it beat estimates on its top and bottom lines in its quarterly earnings report.

So what: The clean energy specialist posted an adjusted EPS of $0.56, ahead of estimates of $0.42, and revenues jumped 8%, to $865.3 million, easily beating estimates of $841.7 million. Guidance for 2013 was also strong, with revenue of $3.4 to $3.55 billion, in line with estimates, and adjusted EPS of $2.25 to $2.45 was ahead of analyst projections.

Now what:After an initial jump, shareholders seemed to be less enthusiastic, as the stock finished with just a 2.2% gain on the day. Taking out adjustments for mark-to-market pricing and pension plans, Babcock & Wilcox only made a $0.33 per-share profit in the quarter, and top-line growth for the next year looks sluggish at just about 6.5%. Management has helped boost earnings per share with buybacks, but they will need stronger growth opportunities to keep the stock price moving up.

Want more info on Babcock & Wilcox?

The article Why Babcock & Wilcox Shares Jumped originally appeared on Fool.com.

Fool contributor Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Originally published