Curtiss-Wright Corp ((CW)) has held its Q2 earnings call. Read on for the main highlights of the call.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Curtiss-Wright Corp’s recent earnings call showcased a robust financial performance, marked by significant sales growth, improved orders, and an upward revision in guidance. Despite some challenges in the Ground Defense market and concerns about order timing in Defense Electronics, the overall sentiment was overwhelmingly positive, reflecting the company’s strong financial health.
Strong Sales and Revenue Growth
Curtiss-Wright reported a remarkable 12% year-over-year increase in sales, reaching $877 million, with a strong organic growth of 9%. This impressive performance was further highlighted by a 20% increase in operating income and a 21% rise in diluted earnings per share, underscoring the company’s effective operational strategies.
Significant Increase in Orders and Backlog
The company witnessed robust demand, with new orders totaling $1 billion, resulting in a book-to-bill ratio of over 1.1x. The backlog has also seen a 12% increase year-to-date, surpassing $3.8 billion, indicating a healthy pipeline of future business.
Full-Year Guidance Raised
Curtiss-Wright has raised its full-year guidance, projecting sales growth of 9% to 10% and diluted EPS growth of 16% to 19%. The operating margin is expected to exceed 18.5%, reflecting the company’s confidence in sustaining its growth trajectory.
Free Cash Flow Improvement
Free cash flow improved significantly to $117 million, a 17% year-over-year increase. The company has adjusted its free cash flow guidance upwards to a range of $520 million to $535 million, marking an 8% to 11% improvement.
Capital Allocation Achievements
The Board of Curtiss-Wright approved a $400 million increase in share repurchase authorization and a 14% increase in the quarterly dividend, marking the ninth consecutive year of dividend growth. These moves highlight the company’s commitment to returning value to shareholders.
Challenges in Ground Defense Market
Despite the overall positive outlook, Curtiss-Wright anticipates a sequential decline in sales within the Ground Defense market in Q3. This is attributed to timing issues related to year-to-date orders and the impact of the U.S. government’s fiscal year-end.
Defense Electronics Book-to-Bill Below 1.0
The Defense Electronics segment recorded a book-to-bill ratio of 0.9, indicating challenges in order timing and potential pressure on future growth. This segment will require strategic focus to address these issues moving forward.
Forward-Looking Guidance
Curtiss-Wright provided an optimistic outlook for the remainder of the year, raising its 2025 guidance based on strong financial performance. The company expects sales growth of 9% to 10%, operating margin expansion of 100 to 120 basis points, and diluted EPS growth of 16% to 19%. Additionally, free cash flow is projected to exceed 105% conversion, indicating robust financial health and strategic alignment with growth opportunities in defense and commercial nuclear markets.
In summary, Curtiss-Wright Corp’s earnings call painted a picture of strong financial health and strategic growth. The company’s impressive sales and revenue growth, coupled with increased orders and a raised full-year guidance, underscore its robust market position. While challenges exist in certain segments, the overall sentiment remains positive, reflecting confidence in the company’s future prospects.