Curtiss-Wright Q2 Earnings Call Highlights

Curtiss-Wright NYSE: CW raised its full-year 2026 earnings, revenue and free-cash-flow outlook after reporting second-quarter results that management said exceeded expectations, supported by growth across aerospace and defense and commercial markets, expanding margins and a growing order book. Second-quarter sales rose 5% from a year earlier to $924 million, while operating income increased 12%, producing 110 basis points of operating-margin expansion. Diluted earnings per share increased 15% year over year. The company generated $160 million of free cash flow during the quarter, up 37% from the prior year, with free-cash-flow conversion of 116%. New orders increased 8% in the second quarter, resulting in a book-to-bill ratio above 1.1x. Through the first half, orders rose 12%, exceeding sales growth of 9% and producing a year-to-date book-to-bill ratio above 1.2x. Defense Electronics posted a record order performance, with bookings increasing nearly 50% from a year earlier in the quarter and more than 30% year to date. The segment received awards for Turret Drive Stabilization Systems for international ground vehicles, tactical communications equipment for U.S. military operations, modernization efforts for helicopters, unmanned aerial vehicles and fighter jets, as well as initial Golden Dome orders and development contracts for next-generation programs. The strengthening order book reflects Curtiss-Wright’s alignment with U.S. and international defense spending, as well as momentum in commercial aerospace and industrial markets. Some Defense Electronics orders, including those related to the C-17 program and turret-drive systems, have multiyear characteristics. Management also said it has seen no indication that prior timing delays in Defense Electronics orders reflect weakening demand. The company’s strong first- and second-quarter order activity, along with a strong July and expectations for the third quarter, support the view that the delays were timing-related. Segment Performance Reflects Aerospace, Naval and Nuclear Strength Aerospace & Industrial sales increased 12% during the quarter. Growth included higher defense sales of actuation and sensor equipment for U.S. and foreign fighter programs, as well as electromagnetic actuation equipment for ground-based mobile launcher systems. Commercial aerospace also benefited from higher original-equipment-manufacturer sales across narrow-body and wide-body platforms.