Shares of Broadwind (BWEN) experienced a significant downturn in trading following the release of the company’s third-quarter (Q3) revenue, which fell short of market expectations. The decline was exacerbated by the company’s CEO warning investors that 2024 would be a “transitional year” for the still-recovering industry.
Broadwind, a leading player in the manufacturing sector, saw its stock, which closed Friday’s trading session at $2.84, commence trading at $3.00 on Monday. However, the Q3 financial results release took a toll on investor confidence, and the stock is currently trading at $2.09, reflecting a substantial 26.41% decline.
At the time of this publication, Broadwind Inc stock (BWEN) has witnessed a decline.
Broadwind Inc
Current Price: $2.09
Change : -0.75
Change (%): (-26.41%)
Volume: 1.2M
Source: Tomorrow Events Market Data
For the three months ending September 30, 2023, Broadwind reported total Q3 revenue of $57.2 million, marking a commendable 27% increase compared to the same period the previous year. Despite the growth, the figure fell short of estimates by $1.1 million, contributing to the market’s negative reaction. The company reported a GAAP net income of $4.4 million, or $0.20 per diluted share, a stark contrast to the net loss of ($1.8) million, or ($0.09) per basic share, reported in the third quarter of 2022. The non-GAAP adjusted EBITDA for Q3 2023 was $7.6 million, reflecting a significant increase of $5.7 million compared to the prior-year period. A detailed reconciliation of GAAP to non-GAAP metrics can be found in the appendix of this release.
The third quarter of 2023 proved to be a success for Broadwind, with the company witnessing substantial year-over-year revenue growth across all reporting segments. Improved consolidated profitability was attributed to robust demand in key end-markets, sustained price discipline, enhanced fixed cost absorption, more efficient raw materials procurement, reduced freight expenses, and benefits from advanced manufacturing credits associated with the Inflation Reduction Act (“IRA”).
Broadwind’s total backlog surged by $88.6 million on a year-over-year basis, reaching $220.8 million in the third quarter of 2023. This growth was particularly supported by increased activity in the Heavy Fabrications and Industrial Solutions segments. As of September 30, 2023, the company reported total cash on hand and availability under its credit facility of $13.6 million, slightly down from $14.8 million at the end of the third quarter of 2022, excluding the value of its advanced manufacturing credit receivable earned under the IRA.
Despite the positive operational results, CEO [CEO Name] cautioned investors about the challenges ahead, deeming 2024 as a “transitional year” for the industry. This cautious outlook, coupled with the revenue miss, has led to a dip in investor confidence, contributing to the decline in Broadwind’s stock value.
Analysts and investors will be closely monitoring Broadwind’s strategic moves and market dynamics in the coming quarters as the industry navigates through what the CEO describes as a transitional period.
