10-QPeriod: Q3 FY2024

CURTISS WRIGHT CORP Quarterly Report for Q3 Ended Sep 30, 2024

Filed October 31, 2024For Securities:CW

Summary

Curtiss-Wright Corporation reported a strong third quarter and nine-month performance, driven by robust sales growth across its key segments, particularly Defense Electronics and Naval & Power. Total net sales increased by 10% for the quarter and 12% year-to-date, reflecting broad-based demand in aerospace & defense and commercial markets. Net earnings saw a significant uplift, growing 15% for the quarter and 22% year-to-date, underscoring the company's operational efficiency and effective cost management. The company also announced a definitive agreement to acquire Ultra Energy for $200 million, expected to close in Q4 2024, which will further bolster its Naval & Power segment. Looking ahead, Curtiss-Wright continues to focus on strategic growth initiatives, including acquisitions and optimizing operational efficiencies through its 2024 Restructuring Program, which is expected to yield approximately $10 million in annual cost savings. The company maintains a solid financial position with ample liquidity and a strong order backlog of approximately $3.3 billion, with 90% expected to be recognized as revenue over the next 36 months, providing good visibility into future performance.

Financial Highlights

54 data points
Beta

Revenue

$798.92M

37.3% Gross Margin

Net Income

$111.16M

13.9% Net Margin

EPS (Diluted)

$2.89

Total Assets

$4.89B

Cash & Equivalents

$443.85M

Free Cash Flow

$162.69M

Financial Statements
Beta
Revenue$798.92M
Cost of Revenue$500.65M
Gross Profit$298.26M
R&D Expenses$20.73M
Operating Income$144.90M
Interest Expense$11.41M
Net Income$111.16M
EPS (Basic)$2.91
EPS (Diluted)$2.89
Shares Outstanding (Basic)38.21M
Shares Outstanding (Diluted)38.45M

Key Highlights

  • 1Total net sales increased 10% to $798.9 million in Q3 2024 and 12% to $2.3 billion for the first nine months of 2024, indicating strong top-line growth.
  • 2Net earnings grew 15% to $111.2 million in Q3 2024 and 22% to $287.1 million for the first nine months of 2024, demonstrating improved profitability.
  • 3The Defense Electronics segment showed significant strength, with sales up 12% in Q3 and 38% operating income growth year-to-date.
  • 4The Naval & Power segment also performed well, with sales up 14% in Q3 and a notable increase in new orders, driven by submarine and aircraft carrier programs.
  • 5The company announced a definitive agreement to acquire Ultra Energy for $200 million, expected to close in Q4 2024, enhancing its reactor protection systems capabilities.
  • 6Curtiss-Wright continues its share repurchase program, spending $138 million in the first nine months of 2024, alongside a quarterly dividend increase to $0.21 per share.
  • 7A significant backlog of approximately $3.3 billion provides strong revenue visibility, with 90% expected to be recognized within the next 36 months.

Frequently Asked Questions

Revenue growth was primarily driven by strong demand across the aerospace & defense (A&D) markets, particularly in naval defense programs, ground defense equipment, and embedded computing for aerospace applications. Commercial aerospace also contributed positively with increased demand for sensors and actuation products. The acquisition of WSC Inc. also contributed incremental revenue.

Curtiss-Wright is actively managing costs through its 2024 Restructuring Program, which aims to improve operating efficiency and yield approximately $10 million in annual cost savings. The company also benefited from favorable overhead absorption on higher sales in several segments and demonstrated effective cost containment initiatives, leading to a significant increase in net earnings.

The outlook appears positive across segments. Defense Electronics and Naval & Power are experiencing robust demand, particularly from defense programs. The planned acquisition of Ultra Energy is expected to further strengthen the Naval & Power segment. Commercial Aerospace continues to show steady demand. The overall large backlog of $3.3 billion suggests continued revenue generation across these areas.

The company generated strong operating cash flow, increasing by $77 million year-over-year, primarily due to higher earnings and improved working capital management. Curtiss-Wright is actively returning capital to shareholders through share repurchases ($138 million in the first nine months) and an increased quarterly dividend. The company also has significant debt capacity and liquidity available, supporting its strategic acquisition plans.