Shares of Babcock & Wilcox Enterprises Inc. (NYSE:BW) fell as much as 64% in trading Thursday after the energy supplier reported a terrible second quarter. At 11:30 a.m. EDT, the stock was near a session low, down 62.4% on the day.
Quarterly revenue dropped 8.7% to $349.8 million and net loss more than doubled to $151.0 million, or $3.09 per share. Management said the loss was due to an unexpected $115.2 million charge related to the renewable business in the quarter.
The disappointment comes because management said last quarter that revenue would be about $1.8 billion and earnings per share at $0.75 to $0.95. Updated guidance is for revenue of $1.575 billion to $1.675 billion in revenue and that there's no way Babcock & Wilcox can hit its previous earnings guidance this year.
The improvement investors were pricing into the stock earlier this year is now gone, and it's uncertain how the company will react. It's likely Babcock & Wilcox will need to issue new debt if losses persist and there may not be much willingness for the market to give that debt if the company keeps losing money. This just isn't a stock I would bet on given its poor performance over the past year.