Broadwind Energy, Inc. (BWEN - Free Report) , on Sep 5, revised down its tower deliveries, revenues and earnings guidance for the short term. We believe, the news has created skepticism about the machinery company’s prospects, as evident from 3.2% fall in share price since it surfaced.
Illinois-based, Broadwind Energy is primarily engaged in manufacturing, and providing products and services for use in the energy, mining, and infrastructure sectors of the United States. The company has three reportable segments — Tower and Heavy Fabrications, Gearing, and Process Systems.
Inside the Headlines
As revealed, uncertainties surrounding the availability of steel, for fabrication in tower production, have depressed Broadwind Energy’s tower production capabilities. This, in turn, has hurt the company’s commitment to tower deliveries and growth opportunities from firming tower orders.
Primarily accounting for the lost business opportunity, partially offset by strengthening gearing shipments and demand for fabrications (heavy) products, Broadwind Energy has decreased its revenue guidance for the third quarter of 2018 from $34-36 million to $31-$32 million.
Despite the lowered revenue forecast, Broadwind Energy anticipates generating positive earnings before interest, taxes, depreciation and amortization in the third quarter. This anticipation is driven by strengthening orders — primarily from the mining, oil & gas, and wind markets — for the Gearing segment. Impressive labor productivity, material availability and improved scheduling are few tailwinds, boosting the Gearing segment’s prospects. It’s worth noting here that orders for the Gearing segment were $33 million till August this year, reflecting growth of 20% from 2017.
In addition, the company communicated that plant utilization will start recovering as trade uncertainties with foreign nations subsides.
Zacks Rank & Stocks to Consider
Broadwind Energy currently carries a Zacks Rank #3 (Hold). In the past 60 days, bottom-line estimates on the stock have remained stable at 1 cent of earnings per share for the third quarter of 2018, 30 cents of loss per share for 2018 and 36 cents of earnings per share for 2019.
Broadwind Energy, Inc. Price and Consensus