Broadwind Energy (NASDAQ:BWEN) Issues Earnings Results, Misses Expectations By $0.07 EPS

Key Points

• Broadwind reported a quarterly loss of $0.10 per share, missing analyst expectations by $0.07, and revenue of $22.25 million, below the $23.88 million consensus.
• Despite the earnings miss, revenue rose 48% year over year to $22.3 million and adjusted EBITDA improved to $0.5 million from a $1.2 million loss. Orders increased 13% to $33.7 million.
• Broadwind completed its MCM acquisition to expand into electrical transmission and distribution, but cash and credit-facility availability fell to about $16.5 million; shares dropped 16.1% on Thursday.

Broadwind Energy (NASDAQ:BWEN - Get Free Report) posted its quarterly earnings results on Thursday. The industrial products company reported ($0.10) earnings per share for the quarter, missing analysts' consensus estimates of ($0.03) by ($0.07), FiscalAI reports. The firm had revenue of $22.25 million for the quarter, compared to analyst estimates of $23.88 million. Broadwind Energy had a negative return on equity of 1.54% and a net margin of 3.90%.

Here are the key takeaways from Broadwind Energy's conference call:

• Third-quarter revenue rose 48% to $22.3 million, while adjusted EBITDA improved to $0.5 million from a $1.2 million loss a year earlier. Both reporting segments increased sales, and Gearing returned to operating profitability.
• Orders increased 13% to $33.7 million, with power-generation-related orders accounting for more than 70% of the total. Industrial Solutions set records for orders and backlog, while Gearing reported its fifth consecutive quarter of backlog growth and said fourth-quarter orders were on pace to exceed Q3 levels.
• Broadwind completed its acquisition of MCM, expanding into domestic electrical transmission and distribution; management expects the higher-margin business to be immediately accretive. The acquisition is intended to diversify the company’s critical-infrastructure exposure and support its growth strategy.
• After the acquisition and credit-facility amendment, pro forma cash and facility availability is approximately $16.5 million, compared with nearly $40 million before the deal, with total debt of $13 million. Management aims to reduce net leverage below 2.0x through earnings growth and debt repayment.
• Industrial Solutions expects revenue to remain above historical levels, but management said low-double-digit adjusted EBITDA margins are a more appropriate expectation than the high-teens margins of recent quarters. It said existing space and the option to add a second shift provide room to meet near-term customer growth, though hiring remains a challenge.

Broadwind Energy Stock Down 16.1%

BWEN traded down $0.48 during midday trading on Thursday, reaching $2.50. 561,195 shares of the company were exchanged, compared to its average volume of 492,596. Broadwind Energy has a one year low of $1.89 and a one year high of $5.70. The company has a debt-to-equity ratio of 0.07, a quick ratio of 1.73 and a current ratio of 2.72. The company's fifty day moving average price is $3.67 and its 200 day moving average price is $3.50. The company has a market cap of $59.12 million, a price-to-earnings ratio of 10.87 and a beta of 1.83.

Analyst Ratings Changes

A number of equities research analysts have commented on BWEN shares. Weiss Ratings reissued a "hold (c)" rating on shares of Broadwind Energy in a research note on Thursday, August 27th. Roth Capital reaffirmed a "buy" rating and set a $6.50 target price (up from $5.00) on shares of Broadwind Energy in a research report on Wednesday, August 12th. Finally, Wall Street Zen cut Broadwind Energy from a "hold" rating to a "sell" rating in a report on Saturday, September 5th. Two investment analysts have rated the stock with a Buy rating and one has issued a Hold rating to the company's stock. According to MarketBeat, the company currently has an average rating of "Moderate Buy" and a consensus target price of $6.25.

Broadwind Energy Company Profile

Broadwind Energy, Inc. is a precision manufacturer that produces structures, equipment and components for the wind energy, clean technology and other industrial markets. The company provides engineered manufacturing solutions for customers that require large-scale fabrication, machining, assembly and related services. Broadwind's product and service offerings include wind turbine towers, heavy fabrications, industrial equipment and precision gearing. Its manufacturing capabilities include welding, machining, gear manufacturing, assembly, engineering and supply-chain support.

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