NEW YORK (TheStreet) -- Babcock & Wilcox (BWC) shares continued to decline, down -3.7% to $33.51, on Tuesday following the after-hours trading release of the company's first quarter earnings report yesterday.
The company reported a -17.8% decrease in revenue from the previous year's first quarter to $662 million, while earnings were in line with analysts expectations of 42 cents per share.
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In other news, the company's subsidiary, Babcock & Wilcox Power Generation Group, entered into a definitive agreement to acquire industrial processes solutions provider MEGTEC for $155 million.
TheStreet Ratings team rates BABCOCK & WILCOX CO as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate BABCOCK & WILCOX CO (BWC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, notable return on equity, attractive valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Powered by its strong earnings growth of 348.48% and other important driving factors, this stock has surged by 25.92% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, BWC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electrical Equipment industry. The net income increased by 323.8% when compared to the same quarter one year prior, rising from $39.07 million to $165.59 million.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Electrical Equipment industry and the overall market, BABCOCK & WILCOX CO's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The gross profit margin for BABCOCK & WILCOX CO is rather high; currently it is at 50.38%. It has increased significantly from the same period last year. Along with this, the net profit margin of 20.62% significantly outperformed against the industry average.
- You can view the full analysis from the report here: BWC Ratings Report