BWX Technologies (NYSE: BWXT) reported Q3 EPS of $0.40, $0.22 worse than the analyst estimate of $0.62. Revenue for the quarter came in at $426 million versus the consensus estimate of $461.09 million.

• 3Q18 revenue growth of 1.5%; 3Q18 orders up significantly; backlog at $3.8 billion
• 3Q18 GAAP EPS of $0.78 and non-GAAP EPS of $0.40, each inclusive of a $0.21 negative impact for missile tube reserves
• Returned $79 million to shareholders in 3Q18; approved a new $250 million share repurchase authorization
• Updated 2018 guidance: non-GAAP EPS in a range of $2.23 to $2.27, revenue of approximately $1.8 billion
• Reiterated long-term guidance of low double-digit EPS growth

“We continue to exhibit top-line strength while building backlog,” said Rex D. Geveden, president and chief executive officer. “Third quarter results were negatively impacted by a reserve on missile tubes and increased interest expense; however, our long-term outlookremains unchanged. We have updated our 2018 guidance and continue to reiterate our low double-digit EPS CAGR based on our superior competitive positioning, robust organic growth opportunities, and balance sheet capacity.”

“We made substantial progress during the quarter on the missile tube welding issue. The problem is fully characterized, and the required remediations are understood. Accordingly, we have taken a charge in the third quarter to account for those items. Excluding this charge, third quarter NOG margins would have been 21.7%, or about 120 basis points higher than the third quarter of 2017.”

GUIDANCE:

BWX Technologies sees FY2018 EPS of $2.23-$2.27, versus the consensus of $2.52. BWX Technologies sees FY2018 revenue of $1.8 billion, versus the consensus of $1.85 billion.

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