BWX (NYSE:BWXT) Reports Strong Q3

Aerospace and defense company BWX (NYSE:BWXT) reported revenue ahead of Wall Streets expectations in Q3 CY2025, with sales up 28.9% year on year to $866.3 million. On the other hand, the company’s full-year revenue guidance of $3.1 billion at the midpoint came in 0.5% below analysts’ estimates. Its non-GAAP profit of $1 per share was 16.5% above analysts’ consensus estimates.

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“We delivered strong financial results in the third quarter of 2025 including double-digit organic revenue growth and healthy free cash flow,” said Rex D. Geveden president and chief executive officer.

Company Overview

Contributing components and materials to the famous Manhattan Project in the 1940s, BWX (NYSE:BWXT) is a manufacturer and service provider of nuclear components and fuel for government and commercial industries.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Luckily, BWX’s sales grew at a decent 8.1% compounded annual growth rate over the last five years. Its growth was slightly above the average industrials company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. BWX’s annualized revenue growth of 13% over the last two years is above its five-year trend, suggesting its demand recently accelerated.

We can dig further into the company’s revenue dynamics by analyzing its most important segments, Government Operations and Commercial Operations, which are 71.2% and 29% of revenue. Over the last two years, BWX’s Government Operations revenue (public sector sales) averaged 10.1% year-on-year growth while its Commercial Operations revenue (private sector sales) averaged 27.5% growth.

This quarter, BWX reported robust year-on-year revenue growth of 28.9%, and its $866.3 million of revenue topped Wall Street estimates by 9.2%.

Looking ahead, sell-side analysts expect revenue to grow 9.4% over the next 12 months, a deceleration versus the last two years. Despite the slowdown, this projection is commendable and implies the market is forecasting success for its products and services.

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Operating Margin

Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development.

BWX has been an efficient company over the last five years. It was one of the more profitable businesses in the industrials sector, boasting an average operating margin of 15%.

Analyzing the trend in its profitability, BWX’s operating margin decreased by 2.7 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

This quarter, BWX generated an operating margin profit margin of 13.1%, down 1.3 percentage points year on year. This reduction is quite minuscule and indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

BWX’s EPS grew at an unimpressive 5.1% compounded annual growth rate over the last five years, lower than its 8.1% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded due to non-fundamental factors such as interest expenses and taxes.

We can take a deeper look into BWX’s earnings to better understand the drivers of its performance. As we mentioned earlier, BWX’s operating margin declined by 2.7 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For BWX, its two-year annual EPS growth of 14.2% was higher than its five-year trend. This acceleration made it one of the faster-growing industrials companies in recent history.

In Q3, BWX reported adjusted EPS of $1, up from $0.83 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects BWX’s full-year EPS of $3.85 to stay about the same.

Key Takeaways from BWX’s Q3 Results

We were impressed by how significantly BWX blew past analysts’ revenue expectations this quarter. We were also glad its Government Operations revenue topped Wall Street’s estimates. On the other hand, its full-year revenue guidance slightly missed. Overall, we think this was still a solid quarter, but the guidance shortfall seems to be weighing on shares. The stock traded down 1.2% to $213.50 immediately following the results.

Is BWX an attractive investment opportunity right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.