Why did Curtiss-Wright raise its full-year 2026 guidance?

Management cited a strong start to the year, with Q1 sales, margin, EPS, and free cash flow ahead of expectations, along with a 1.3x book-to-bill and a strong order book. Defense growth was stronger than expected, particularly in Naval Defense (submarine and aircraft carrier programs) and Aerospace Defense, and Commercial Nuclear demand was also stronger. Operating margin guidance was raised to 19.0%-19.2%, reflecting growth in all segments.

What is the difference between GAAP and adjusted results this quarter?

The differences are small. GAAP operating income was $159.5M versus $160.4M adjusted, and GAAP diluted EPS was $3.46 versus $3.48 adjusted, with the gap driven by about $0.9M of 2026 restructuring costs. Prior-year Q1 adjustments were larger (about $4.8M of operating income, including first-year acquisition accounting costs), which is why the GAAP operating income growth of 23% exceeds the adjusted growth of 20%.

Is the negative first-quarter free cash flow a concern?

Not necessarily. Q1 free cash flow of ($17)M is seasonal and improved by $37M from the prior year, driven by higher cash earnings and better working capital. Management still expects full-year free cash flow of $580M-$600M, with conversion above 105%, though this year's guidance includes about $25M of additional growth capital expenditures.

What is driving growth in the Naval & Power segment?

Naval & Power sales rose 21% to $402M, driven by production timing on Virginia-class and Columbia-class submarine programs, higher aftermarket fleet services, and aircraft handling systems for international customers. Commercial nuclear sales also grew, supporting both existing reactor maintenance and next-generation advanced reactor projects. Segment operating margin improved to 14.9% on an adjusted basis, up 140 bps.

How is the balance sheet positioned to support the company's capital allocation strategy?

Cash and equivalents were $343M at March 31, 2026, and long-term debt was about $758M, with a $200M senior note due in December 2026 currently classified as a current liability. Total equity rose to $2.63B. Management describes the balance sheet as efficient with ample liquidity, supporting capital returns (dividends and buybacks) and strategic acquisitions while funding higher growth capex.

CW 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed May 7, 2026. Cited figures are marked; the original filing is the authoritative source.

Curtiss-Wright reported a strong first quarter of 2026, with sales of $914 million^a (up 13%, or 12% organic), GAAP operating income of $160 million (up 23%), and GAAP diluted EPS of $3.46.

On an adjusted basis, which excludes first-year acquisition accounting and restructuring costs, operating income rose 20% to $160 million^b, operating margin expanded 100 basis points to 17.6%, and diluted EPS rose 23% to $3.48. Growth was broad: Aerospace & Defense markets grew 14% and Commercial markets grew 12%, led by Naval & Power (up 21%), driven by submarine program timing and commercial nuclear demand. Orders of $1.2 billion rose 16%, producing a 1.3x book-to-bill, and backlog reached about $4.3 billion, up 5% from year-end 2025.

Management raised full-year 2026 adjusted guidance across sales (7% to 8% growth, from 6% to 8%), operating income (9% to 12%, from 8% to 11%), operating margin (19.0% to 19.2%), diluted EPS ($14.90 to $15.30^c, up 13% to 16%), and free cash flow ($580 million to $600 million). Free cash flow was negative in the quarter at ($17) million, which is typical seasonality for the company, but it improved $37 million year over year on higher cash earnings and better working capital. The balance sheet remains stable, with cash of $343 million and long-term debt of about $758 million, plus a $200 million note due in December 2026.

The quarter supports management's view that the company is on track to exceed its 2024 to 2026 targets. Key items to monitor include the sustainability of submarine-related Naval Defense timing, the pace of commercial nuclear growth, the impact of tariffs and foreign currency on margins, and the step-up in growth capital expenditures (about $25 million^d higher year over year) that management says supports future growth.

02—Key points

Key Highlights

Q1 2026 sales of $914M rose 13% (12% organic), with A&D markets up 14% and Commercial markets up 12%; Naval & Power led at +21%.
Adjusted operating income rose 20% to $160M, with adjusted operating margin up 100 bps to 17.6%; all three segments expanded margins.
GAAP diluted EPS was $3.46 and adjusted diluted EPS was $3.48, up 23% year over year.
New orders of about $1.2B rose 16% (1.3x book-to-bill), and backlog reached about $4.3B, up 5% from December 31, 2025.
Full-year 2026 adjusted guidance was raised: sales to $3.74B-$3.80B (7%-8%), operating income to $712M-$729M, EPS to $14.90-$15.30, and free cash flow to $580M-$600M.
Q1 free cash flow was ($17)M, a $37M improvement year over year, consistent with seasonal patterns; management reiterated greater than 105% FCF conversion for the year.
Capital returns continued with $14M of share repurchases in Q1 and a $0.24 quarterly dividend, and management plans at least $60M of buybacks in 2026 to offset dilution.

03—Questions

Frequently Asked Questions

Why did Curtiss-Wright raise its full-year 2026 guidance?
Management cited a strong start to the year, with Q1 sales, margin, EPS, and free cash flow ahead of expectations, along with a 1.3x book-to-bill and a strong order book. Defense growth was stronger than expected, particularly in Naval Defense (submarine and aircraft carrier programs) and Aerospace Defense, and Commercial Nuclear demand was also stronger. Operating margin guidance was raised to 19.0%-19.2%, reflecting growth in all segments.
What is the difference between GAAP and adjusted results this quarter?
The differences are small. GAAP operating income was $159.5M versus $160.4M adjusted, and GAAP diluted EPS was $3.46 versus $3.48 adjusted, with the gap driven by about $0.9M of 2026 restructuring costs. Prior-year Q1 adjustments were larger (about $4.8M of operating income, including first-year acquisition accounting costs), which is why the GAAP operating income growth of 23% exceeds the adjusted growth of 20%.
Is the negative first-quarter free cash flow a concern?
Not necessarily. Q1 free cash flow of ($17)M is seasonal and improved by $37M from the prior year, driven by higher cash earnings and better working capital. Management still expects full-year free cash flow of $580M-$600M, with conversion above 105%, though this year's guidance includes about $25M of additional growth capital expenditures.
What is driving growth in the Naval & Power segment?
Naval & Power sales rose 21% to $402M, driven by production timing on Virginia-class and Columbia-class submarine programs, higher aftermarket fleet services, and aircraft handling systems for international customers. Commercial nuclear sales also grew, supporting both existing reactor maintenance and next-generation advanced reactor projects. Segment operating margin improved to 14.9% on an adjusted basis, up 140 bps.
How is the balance sheet positioned to support the company's capital allocation strategy?
Cash and equivalents were $343M at March 31, 2026, and long-term debt was about $758M, with a $200M senior note due in December 2026 currently classified as a current liability. Total equity rose to $2.63B. Management describes the balance sheet as efficient with ample liquidity, supporting capital returns (dividends and buybacks) and strategic acquisitions while funding higher growth capex.

04—Continue

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