Summary
Curtiss-Wright Corporation reported mixed results for the first quarter of 2017, with total net sales increasing by 4% to $523.6 million, driven by growth in its Commercial/Industrial and Defense segments. However, operating income saw a notable decrease of 11% to $51.2 million, primarily impacted by the acquisition of Teletronics Technology Corporation (TTC) in the Defense segment, which negatively affected profitability. The company also experienced a significant decrease in net earnings from continuing operations, down 1% to $32.5 million, and a higher effective tax rate before considering a discrete item related to share-based accounting adoption. Despite the dip in operating income, the company made strategic acquisitions, notably the purchase of TTC for $232.8 million, which is expected to bolster its Defense segment. This acquisition contributed $10 million in sales but also $6 million to the operating income decrease. The Power segment showed resilience with a 5% sales increase and a 13% operating income rise, partly due to higher production on the AP1000 China Direct program. Investors should note the shift in cash flow from operations, which was negative in the quarter ($24.9 million) compared to positive in the prior year, largely due to timing of collections and a one-time benefit in the prior year. The company maintained its liquidity and debt compliance.
Financial Highlights
54 data points| Revenue | $523.59M |
| Cost of Revenue | $356.66M |
| Gross Profit | $166.94M |
| R&D Expenses | $15.59M |
| Operating Income | $47.69M |
| Interest Expense | $10.38M |
| Net Income | $32.55M |
| EPS (Basic) | $0.74 |
| EPS (Diluted) | $0.73 |
| Shares Outstanding (Basic) | 44.25M |
| Shares Outstanding (Diluted) | 44.86M |
Key Highlights
- 1Total net sales increased 4% to $523.6 million, driven by growth across segments, particularly Defense and Commercial/Industrial.
- 2Operating income decreased 11% to $51.2 million, impacted by the recent acquisition of Teletronics Technology Corporation (TTC) in the Defense segment.
- 3Net earnings from continuing operations slightly decreased by 1% to $32.5 million.
- 4The company completed significant acquisitions during the quarter, notably Teletronics Technology Corporation (TTC) for $232.8 million, enhancing its Defense segment capabilities.
- 5The Power segment demonstrated strong performance with a 5% increase in sales and a 13% increase in operating income, supported by the AP1000 China Direct program.
- 6Cash flow from operating activities turned negative at ($24.9 million) compared to a positive $70.3 million in the prior year, due to prior period collections and a one-time benefit.
- 7The company reported a substantial increase in Goodwill by $116.3 million due to acquisitions, bringing the total to $1.07 billion.