BWXT chief says new Esper shipbuilding plan would be 'favorable' to its business

The chief executive of BWX Technologies said today the shipbuilding plan laid out by Defense Secretary Mark Esper last month would be beneficial to the company.

Speaking to analysts today, Rex Geveden said while it "remains to be seen how all that would impact the business . . . in general, I think that that shipbuilding plan, should it come to pass, is favorable to our business."

In October, Esper unveiled Battle Force 2045, a plan to grow the Navy to more than 355 traditional combat force ships by 2035.

While Geveden said the company hasn't seen the shipbuilding plan, he said it is aware of Esper's comments. He noted the new plan increases the number of fast-attack submarines in the fleet, which is "obviously good for us."

Geveden also pointed to the plan to move to three Virginia-class submarines per year.

"When we last discussed any capital needs around that, what we said was if there was a single year of a third Virginia, we could probably accommodate that without any additional build-out," he said. "We haven't evaluated a permanent three-Virginia tempo, and we certainly haven't discussed any capital needs around that, but we would have to invest in that case."

Meanwhile, the company said today sales during its most recent quarter in its nuclear operations group, which includes its naval work, totaled $387 million, down 2% from the same three-month period a year earlier.

The unit reported quarterly profit of almost $69 million, down 27% from the prior year.

Still, BWXT said the business remains the "bedrock" of its 2020 performance and said the unit's sales are up 15% year to date. The company noted there are "quarterly fluctuations experienced from the timing of certain items," arguing year-to-date results are potentially "more reflective of the underlying strength of the segments."