Babcock & Wilcox Reports Q2 2025 Revenue Decline, Improved Operating Income, and Strategic Divestitures

Babcock & Wilcox Enterprises, Inc. reported its financial results for the second quarter of 2025, revealing a revenue of $144.1 million, a decrease of 4.9% from $151.4 million in the same period last year. For the first half of 2025, the company generated $299.9 million in revenue, reflecting a modest increase of 2.6% compared to $292.3 million in the first half of 2024. The company reported an operating income of $8.1 million for the second quarter, a significant improvement from an operating loss of $4.4 million in the prior year. However, the net loss attributable to stockholders was $62.2 million, compared to a net income of $21.7 million in the same quarter of 2024.

The financial performance was influenced by a mix of factors, including a decline in large project volumes in the B&W Thermal and B&W Environmental segments, which accounted for a $20 million drop in revenue. This was partially offset by a $15.5 million increase in parts sales. The company also reported a decrease in costs of operations, which fell to $100.8 million from $118.3 million, primarily due to lower project volumes and improved margins from higher parts sales. Selling, general, and administrative expenses also decreased to $34 million from $36.6 million, contributing to the overall improvement in operating income.

Strategically, Babcock & Wilcox has been active in divesting non-core businesses to enhance liquidity and reduce debt. The company completed the sale of its Vølund business in April 2025 and is in the process of selling its Diamond Power business, which is expected to close on July 31, 2025, for $177 million. These divestitures are part of a broader strategy to streamline operations and focus on core segments, which include B&W Thermal, B&W Renewable, and B&W Environmental. The company has also engaged in a series of debt restructuring activities, including the issuance of new senior secured notes and amendments to its credit agreement to extend maturity dates and adjust financial covenants.

Operationally, Babcock & Wilcox reported a backlog of $418.1 million as of June 30, 2025, a significant increase from $280.8 million a year earlier. This backlog is expected to provide a solid foundation for future revenue, with approximately 55% anticipated to be recognized in 2025. The company has also seen an increase in parts sales, which are expected to drive higher margins moving forward. However, the company continues to face challenges related to market conditions, including inflation and supply chain disruptions, which could impact future performance.

Looking ahead, Babcock & Wilcox remains focused on improving its financial position and operational efficiency. The company is actively pursuing additional divestitures of non-core assets and is implementing measures to enhance cash flow, including the potential suspension of preferred stock dividends. Management believes that these strategies will provide sufficient liquidity to support operations over the next twelve months, despite ongoing uncertainties in the market.