Broadwind Energy, Inc. (BWEN) recently announced that it now expects its top and bottom-line results for fourth-quarter 2014 to come in below the projections previously announced in Oct 2014. The news weakened market sentiments for the stock, with its share price falling nearly 10.1% at the close of the trading session on Jan 8.
Revenues are presently estimated in the range of $53−$54 million as compared with $58−$61 million predicted earlier. The revision was a result of lower operational activities induced by delayed implementation of a new tower design at Broadwind Energy’s Abilene tower facility. The company anticipates earnings from its tower operations to decline roughly $3 million in the fourth quarter.
Besides impacting revenues, the operational issues at the Abilene tower facility will likely increase labor and logistics costs for Broadwind Energy, thus, hurting its margins in the fourth quarter. The twin effect of lower revenues and increased costs are anticipated to adversely affect the bottom-line results. Losses are now predicted to increase from the earlier projection of 20−27 cents per share.
The Zacks Consensus Estimate for Broadwind Energy is currently pegged at a loss of 41 cents per share for 2014 and earnings of 16 cents per share for 2015. We believe that disappointment over the lowered guidance will soon be reflected through downward revision in these estimates.
With a $74.9 million market capitalization, Broadwind Energy currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the machinery industry include The Babcock & Wilcox Company (BWC), Ingersoll-Rand Plc (IR) and Kadant Inc. (KAI). While The Babcock & Wilcox Company sports a Zacks Rank #1 (Strong Buy), both Ingersoll-Rand and Kadant carry a Zacks Rank #2 (Buy).
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