Shares of Curtiss-Wright Corporation CW lost 1.4% to reach $348.82 on Friday, following the release of its third-quarter 2024 results. The company reported adjusted earnings per share (EPS) of $2.97, which beat the Zacks Consensus Estimate of $2.70 by 10%. The bottom line also improved 16.9% from the year-ago quarter’s level of $2.54.
See the Zacks Earnings Calendar to stay ahead of market-making news.
The company reported GAAP earnings of $2.89 per share, up 15.1% from the prior-year period’s $2.51.
The year-over-year upside can be attributed to higher sales and operating income, along with lower interest expenses incurred in the third quarter compared with the year-ago quarter.
CW’s Operational Performance
The company’s net sales of $798.9 million increased 10.3% year over year. Also, the top line surpassed the Zacks Consensus Estimate of $758 million by 5.4%.
The company reported adjusted operating income of $149 million, up 11.2% year over year. The adjusted operating margin expanded 20 basis points (bps) to 18.7%. This upside was primarily driven by favorable overhead absorption on higher revenues in all three segments.
Curtiss-Wright’s total backlog at the end of the third quarter was $3.3 billion, which increased 16% from the 2023-end backlog figure. This improvement can be attributed to higher demand from both aerospace and defense, as well as commercial markets.
New orders of $860 million rose 2% year over year, driven by the strong demand for the company’s aerospace and defense products.
Curtiss-Wright Corporation Price, Consensus and EPS Surprise
Curtiss-Wright Corporation price-consensus-eps-surprise-chart | Curtiss-Wright Corporation Quote
CW’s Segmental Performance
Aerospace & Industrial: Sales in this segment improved 4% year over year to $228.7 million. The upside was driven by higher commercial aerospace market sales, backed by strong demand as well as increased OEM sales of sensor products along with surface treatment services on narrowbody and widebody platforms. Higher revenues from the aerospace defense market were driven by the favorable timing of sales for its actuation equipment on various fighter jet programs also benefited this segment’s top line.
The adjusted operating income improved 1% to $39.4 million. Also, the adjusted operating margin decreased 50 bps to 17.2%. The decline was due to an unfavorable mix of products.
Defense Electronics: Sales in this segment advanced 12% year over year to $243 million. This rise was driven by increased sales of CW’s embedded computing equipment on various domestic and international helicopter programs. Also, higher sales of tactical battlefield communications equipment as well as increased OEM sales of avionics and electronics on various platforms contributed to this segment’s sales growth.
The adjusted operating income increased 15% to $64.5 million. The adjusted operating margin expanded 50 bps to 26.5%, driven by favorable absorption on higher Aerospace and Defense revenues.
Naval & Power: Sales in this segment increased 14% year over year to $327.2 million, driven by higher demand for various submarine programs and the CVN-81 aircraft carrier program. Moreover, increased commercial nuclear aftermarket sales supporting the maintenance of operating reactors in the United States as well as higher growth from various next-generation submarine development programs are likely to have boosted this segment’s sales growth.
The segment's adjusted operating income increased 10% to $53.8 million. The adjusted operating margin, however, contracted 60 bps to 16.4% due to unfavorable mix of products and timing of development programs.
Financial Position of CW
CW’s cash and cash equivalents as of Sept. 30, 2024 were $443.9 million compared with $406.9 million as of Dec. 31, 2023.
The long-term debt was $0.96 billion as of the same compared with $1.05 billion as of Dec. 31, 2023.
The net cash flow from operating activities amounted to $243 million during the first nine months of 2024 compared with $165.7 million in the prior-year period.
The adjusted free cash flow at the end of Sept. 30, 2024 was $205.3 million compared with $143.7 million in the previous year.
2024 Guidance of CW
Curtiss-Wright has increased its guidance for 2024. The company now expects to generate adjusted earnings in the band of $10.55-$10.75 per share, up from its prior guided range of $10.40-$10.65. The Zacks Consensus Estimate for earnings is pegged at $10.66 per share, which lies just above the midpoint of the company’s guided range.
Curtiss-Wright now expects to generate sales in the range of $3.05-$3.10 billion compared with the earlier guidance of $3.01-$3.06 billion. The Zacks Consensus Estimate for sales is pegged at $3.05 billion, which is in line with the lower end of the company’s new guidance.
The company now expects to generate free cash flow in the band of $430-$450 million, up from its prior guided range of $425-$445 million.
CW’s Zacks Rank
Curtiss-Wright currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
Hexcel Corporation HXL reported third-quarter adjusted earnings of 47 cents per share, which improved 23.7% from the year-ago quarter’s figure of 38 cents. The bottom line also surpassed the Zacks Consensus Estimate by 2.2%.
Net sales totaled $456.5 million, which beat the consensus estimate of $456.2 million by 0.1%. The top line also witnessed an improvement of 8.8% from the year-ago quarter’s figure of $419.5 million.
RTX Corporation RTX reported third-quarter 2024 adjusted earnings per share of $1.45, which surpassed the Zacks Consensus Estimate of $1.33 by 9%. The bottom line also improved 16% from the year-ago quarter’s level of $1.25.
RTX’s sales totaled $20.09 billion, which surpassed the consensus estimate of $19.91 billion by 0.9%. The top line also surged 49.2% from $13.46 billion recorded in the third quarter of 2023.
Lockheed Martin Corporation LMT reported third-quarter adjusted earnings of $6.84 per share, which beat the Zacks Consensus Estimate of $6.47 by 5.7%. The bottom line also rose 1% from the year-ago quarter's figure of $6.77.
Net sales totaled $17.10 billion, which missed the consensus estimate of $17.28 billion by 1%. The top line, however, increased 1.3% from $16.88 billion reported in the year-ago quarter.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners UpLockheed Martin Corporation (LMT) : Free Stock Analysis Report
Hexcel Corporation (HXL) : Free Stock Analysis Report
Curtiss-Wright Corporation (CW) : Free Stock Analysis Report
RTX Corporation (RTX) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
