Summary
Curtiss-Wright Corporation reported a significant increase in net earnings for the first quarter of 2012, driven primarily by a substantial gain from the divestiture of its Heat Treating business. While net sales saw a healthy 11% increase year-over-year to $501.7 million, operating income declined by 9% due to higher restructuring charges, start-up costs in the super vessel business, and unfavorable mix on certain defense programs. The company's strategic divestiture of its non-core Heat Treating business is a key event, allowing it to focus on higher-technology engineered services. This divestiture resulted in a significant gain on sale and reclassification of the business's results as discontinued operations, boosting overall net earnings to $41.3 million ($0.87 per diluted share) compared to $24.5 million ($0.52 per diluted share) in the prior year. Despite the boost from the divestiture, investors should note the underlying decline in operating income from continuing operations, signaling potential near-term operational headwinds. Looking ahead, Curtiss-Wright's diversified segments show mixed performance. Flow Control experienced stable sales but a slight dip in operating income. Motion Control saw modest sales growth but a significant drop in operating income due to restructuring and program-specific challenges. Metal Treatment, however, demonstrated strong growth in both sales and operating income. The company maintains a solid balance sheet and positive cash flow from investing activities, largely due to the divestiture proceeds.
Financial Highlights
54 data points| Revenue | $501.66M |
| Cost of Revenue | $342.39M |
| Gross Profit | $159.27M |
| R&D Expenses | $15.35M |
| Operating Income | $35.56M |
| Interest Expense | $6.48M |
| Net Income | $41.31M |
| EPS (Basic) | $0.88 |
| EPS (Diluted) | $0.87 |
| Shares Outstanding (Basic) | 46.69M |
| Shares Outstanding (Diluted) | 47.57M |
Key Highlights
- 1Net earnings surged to $41.3 million ($0.87/diluted share) in Q1 2012, significantly boosted by an $18.4 million gain from the divestiture of the Heat Treating business.
- 2Total net sales increased by 11% year-over-year to $501.7 million, driven by strong performance in commercial aerospace and other commercial markets, as well as contributions from acquisitions.
- 3Operating income decreased by 9% to $35.6 million, impacted by $2.5 million in new restructuring charges in the Motion Control segment and start-up costs in the super vessel business.
- 4The divestiture of the Heat Treating business, completed on March 30, 2012, resulted in the reclassification of its results as discontinued operations.
- 5The Flow Control segment saw a 12% sales increase, while the Metal Treatment segment reported a robust 29% sales increase and a 30% increase in operating income.
- 6The Motion Control segment experienced a 3% sales increase but a significant 21% decrease in operating income, attributed to restructuring charges and unfavorable defense program mix.
- 7Cash provided by investing activities was $29.1 million, primarily due to proceeds from the Heat Treating divestiture.