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Broadwind Receives Tower Contract, Provides Business Update

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Broadwind Energy, Inc. (BWEN - Free Report) yesterday announced that it received a wind tower order worth $21 million. Concurrently, the company provided a business update that is pointing toward difficulties for third-quarter 2020.

It is worth mentioning here that shares of Broadwind declined 2.7% yesterday.

Inside the Headlines

As noted, the company received the order from a present wind turbine customer. It will accomplish the manufacturing part of the order at its facility situated in Abilene, TX. The delivery of manufactured tower sections is anticipated to begin in the first half of 2021.

It is worth noting here that Broadwind won a similar order worth $19 million in late April 2020. The delivery of tower sections is anticipated to be accomplished in 2021. In addition, the company received a $5-million tower order in March 2020.

In second-quarter 2020, a hike in demand for wind towers increased Broadwind’s orders by 17% sequentially to $39.6 million. Also, the company’s total backlog at the second-quarter end was at $112.1 million, reflecting a decline of 12% from the previous quarter due mainly to the pandemic-related impact on the timing of customer orders.

Beside the contract received, Broadwind communicated that some tower contract meant for third-quarter 2020 has been shifted to the first quarter of 2021 by one of its wind turbine OEM customers. It also noted that the demand for its Gearing segment will be weaker than the year-ago period. Improvements might be visible in 2021.

The company believes that adjusted earnings before interest, tax, depreciation and amortization (EBITDA) of up to $2.5 million will be shifted to the first half of 2021 from the second half of 2020. This is mainly due to the lower utilization of plant capacity. The shift is expected to have an adverse impact on the company’s third-quarter 2020 results.

In third-quarter 2020, the Zacks Consensus Estimate of the company’s revenues is pegged at $56.2 million, reflecting year-over-year growth of 21.7%. Also, the consensus estimate for earnings is pegged at 7 cents, suggesting a rise of 216.7% from the year-ago quarter. Also, earnings estimates have been revised upward from earnings of 3 cents mentioned 60 days ago.

Zacks Rank, Estimate Trend and Price Performance

Broadwind currently carries a Zacks Rank #3 (Hold). Presence in multiple end-markets, effective capital management and efficient manufacturing activities are advantageous for the company, especially amid the pandemic-related difficult operating conditions.

In the past three months, the company’s shares have gained 14.9% compared with the industry’s rally of 12.8%.



 

Meanwhile, the Zacks Consensus Estimate for its earnings has been lowered by 11.8% to 15 cents for 2020 and has been raised by 24.2% to 41 cents for 2021 in the past 60 days. On a year-over-year basis, estimates suggest an increase of 165.2% for 2020 and 176.7% for 2021.

Broadwind Energy, Inc. Price and Consensus

 

Broadwind Energy, Inc. Price and Consensus

Broadwind Energy, Inc. price-consensus-chart | Broadwind Energy, Inc. Quote

Stock That Warrants a Look

Some better-ranked stocks in the industry are Tennant Company (TNC - Free Report) , Altra Industrial Motion Corp. (AIMC - Free Report) and Roper Technologies, Inc. (ROP - Free Report) . While Tennant currently sports a Zacks Rank #1 (Strong Buy), both Altra Industrial and Roper Technologies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 60 days, earnings estimates for these companies have improved for the current year. Further, earnings surprise for the last reported quarter was 380.00% for Tennant, 76.47% for Altra Industrial and 10.11% for Roper Technologies.

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