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Broadwind Energy Cuts Q3 Sales View on Ailing Tower Business
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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.
Also, the company’s shares have declined 13.9% in the past three months versus 4.5% growth recorded by the industry it belongs to.
Some better-ranked stocks worth considering in the industry are Colfax Corporation , DXP Enterprises, Inc. (DXPE - Free Report) and Altra Industrial Motion Corp. . While both Colfax and DXP Enterprises sport a Zacks Rank #1 (Strong Buy), Altra Industrial Motion carries a Zacks Rank #2 (Buy). You can seethe complete list of today’s Zacks #1 Rank stocks here.
In the last 60 days, earnings estimates for each of these stocks have improved for the current year. Also, average positive earnings surprise for the last four quarters has been 7.91% for Colfax, 101.32% for DXP Enterprises and 4.01% for Altra Industrial Motion.
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Broadwind Energy Cuts Q3 Sales View on Ailing Tower Business
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
Broadwind Energy, Inc. Price and Consensus | Broadwind Energy, Inc. Quote
Also, the company’s shares have declined 13.9% in the past three months versus 4.5% growth recorded by the industry it belongs to.
Some better-ranked stocks worth considering in the industry are Colfax Corporation , DXP Enterprises, Inc. (DXPE - Free Report) and Altra Industrial Motion Corp. . While both Colfax and DXP Enterprises sport a Zacks Rank #1 (Strong Buy), Altra Industrial Motion carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the last 60 days, earnings estimates for each of these stocks have improved for the current year. Also, average positive earnings surprise for the last four quarters has been 7.91% for Colfax, 101.32% for DXP Enterprises and 4.01% for Altra Industrial Motion.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>