New Federal Securities Cases
A class action lawsuit has been filed in the United States District Court for the Western District of North Carolina against Babcock & Wilcox Enterprises, Inc. ("B&W" or the "Company") (NYSE: BW), on behalf of all persons or entities who purchased or otherwise acquired B&W common stock during the period from July 1, 2015 through February 28, 2017 (the "Class Period").
The lawsuit charges B&W and certain of its officers and directors with violations of the Securities Exchange Act of 1934. B&W is a technology-based provider of advanced fossil and renewable power generation equipment that includes a suite of boiler products, environmental systems, and services for power and industrial uses.
On July 1, 2015, B&W began trading independently as a public company after spinning off from The Babcock & Wilcox Company by way of distribution of shares of B&W common stock to holders of the Company's former parent. The distribution of B&W common stock was made on June 30, 2015, and consisted of one share of B&W common stock for every two shares of the former parent's common stock as of the record date, June 18, 2015. Cash was paid in lieu of any fractional shares of B&W common stock.
The lawsuit alleges that throughout the Class Period, the Company was experiencing significant, undisclosed problems in its Renewable segment. Although defendants disclosed issues with a single project in the Renewable business on June 28, 2016, the lawsuit alleges they failed to disclose that similar problems were significantly and negatively impacting other projects in the Company's Renewable segment, instead assuring investors during a business update call that the problems were "a single project issue."
Then, after the market closed on February 28, 2017, the Company announced its fourth quarter and full year 2016 financial results. Missing earnings expectations by a wide margin, the Company lost $71.6 million, or ($1.47) per share, in the fourth quarter on revenue totaling $380 million. Accounting for one-time gains and losses, the announcement was even worse, with the Company losing an adjusted $77.7 million, or ($1.60) per share, on continuing operations - a full $1.97 per share lower than the average analyst's projection for adjusted earnings per share ("EPS") of positive $0.37. The Company also revealed that it took charges in the fourth quarter 2016 resulting from its Renewable business, which reduced margins, and also increased its contingencies for several of its Renewable projects, which also negatively impacted the Company's financial condition.
On this news, the price of B&W stock dropped rapidly. After closing at $16.50 per share on February 28, 2017, the stock opened at $11.09 on March 1, 2017, and ultimately dropped 37% to close at $10.33 per share on abnormally high trading volume, damaging investors.
If you acquired B&W securities during the Class Period, you may, no later than May 2, 2017, request that the court appoint you lead plaintiff of the proposed class. Although your ability to share in any recovery is not affected by the decision whether or not to seek appointment as a lead plaintiff, lead plaintiffs make important decisions that could affect the overall recovery for class members, including decisions concerning settlement.
If you are a current or former B&W shareholder and wish to obtain additional information, please fill out the contact form at the link below.
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