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

Management cited strong first-half execution, a record backlog and a strong order book, with orders up 8% and a 1.16x book-to-bill. Sales growth guidance moved to 8% to 9% from 7% to 8%, and operating income growth rose to 11% to 13% from 9% to 12%, reflecting growth in most end markets and margin expansion across segments.

What drove the difference between GAAP and adjusted results in Q2 2026?

Reported diluted EPS of $4.07 included a $0.36 per share gain on equity securities held for investment, which the company excludes from adjusted EPS of $3.72. Restructuring costs of about $0.01 per share were also excluded. Investors should weigh the non-recurring equity gain when assessing underlying earnings power.

Are there any weak spots in the quarter?

Defense Electronics sales declined 3% to $246 million, reflecting lower Ground Defense revenue from the timing of tactical communications equipment sales and lower helicopter program sales. Ground Defense sales fell 8% in the quarter, and full-year Ground Defense guidance remains negative at 4% to 6%. Segment margin in Defense Electronics still improved to 28.0%.

How strong is the cash generation and balance sheet?

Q2 free cash flow was $160 million, up from $117 million, helped by higher cash earnings, lower working capital and lower tax payments. Cash rose to $477 million at June 30, 2026, from $371 million at year-end 2025. Total debt was about $957 million, with $200 million of 4.24% senior notes due December 2026 that management expects to address in its capital plans.

CW 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed August 6, 2026. Cited figures are marked; the original filing is the authoritative source.

Curtiss-Wright (NYSE: CW) reported second-quarter 2026 results on August 5, 2026 that beat on profitability and cash flow, and management raised its full-year 2026 adjusted guidance across sales, operating income, margin, EPS and free cash flow.

Sales rose 5% to $924 million^a, while adjusted operating income climbed 12% to $179 million and adjusted operating margin expanded 110 basis points to 19.4%. Adjusted diluted EPS grew 15% to $3.72, and free cash flow reached $160 million, a 37% increase and 116% conversion of adjusted earnings. Orders and backlog remain the key strength.

New orders rose 8% to $1.1 billion^b for a 1.16x book-to-bill, with management citing record demand for defense electronics. Backlog reached $4.5 billion, up 10% from year-end 2025. Growth was broad-based across Naval Defense, Commercial Aerospace and Power & Process, while Ground Defense was a drag due to the timing of tactical communications sales and Defense Electronics sales declined 3%.

Full-year 2026 adjusted guidance was lifted to sales growth of 8% to 9%, operating income growth of 11% to 13%, diluted EPS of $15.10 to $15.40^c (up 14% to 16%), and free cash flow of $585 to $605 million. The raise is modest but consistent with a company executing on its growth strategy, though investors should note that adjusted results exclude restructuring costs and a $0.36 per share gain on equity securities, and that GAAP diluted EPS in the quarter was $4.07.

02—Key points

Key Highlights

Q2 2026 sales of $924 million, up 5%; adjusted operating income of $179 million, up 12%, with adjusted operating margin of 19.4%, up 110 bps.
Adjusted diluted EPS of $3.72, up 15% year over year; reported GAAP diluted EPS of $4.07 included a $0.36 gain on equity securities.
New orders of $1.1 billion, up 8%, for a 1.16x book-to-bill; backlog of $4.5 billion, up 10% from December 31, 2025.
Free cash flow of $160 million, up 37%, representing 116% conversion; management reaffirmed FCF conversion above 105% for the full year.
Full-year 2026 adjusted guidance raised: sales growth to 8% to 9%, operating income growth to 11% to 13%, diluted EPS to $15.10 to $15.40, and FCF to $585 to $605 million.
Margin expansion in all three segments; Defense Electronics posted a record quarter for margin at 28.0%, while Defense Electronics sales fell 3% on Ground Defense timing.
Board raised the quarterly dividend 8% to $0.26 per share, the tenth consecutive annual increase.

03—Questions

Frequently Asked Questions

Why did Curtiss-Wright raise its full-year 2026 guidance?
Management cited strong first-half execution, a record backlog and a strong order book, with orders up 8% and a 1.16x book-to-bill. Sales growth guidance moved to 8% to 9% from 7% to 8%, and operating income growth rose to 11% to 13% from 9% to 12%, reflecting growth in most end markets and margin expansion across segments.
What drove the difference between GAAP and adjusted results in Q2 2026?
Reported diluted EPS of $4.07 included a $0.36 per share gain on equity securities held for investment, which the company excludes from adjusted EPS of $3.72. Restructuring costs of about $0.01 per share were also excluded. Investors should weigh the non-recurring equity gain when assessing underlying earnings power.
Are there any weak spots in the quarter?
Defense Electronics sales declined 3% to $246 million, reflecting lower Ground Defense revenue from the timing of tactical communications equipment sales and lower helicopter program sales. Ground Defense sales fell 8% in the quarter, and full-year Ground Defense guidance remains negative at 4% to 6%. Segment margin in Defense Electronics still improved to 28.0%.
How strong is the cash generation and balance sheet?
Q2 free cash flow was $160 million, up from $117 million, helped by higher cash earnings, lower working capital and lower tax payments. Cash rose to $477 million at June 30, 2026, from $371 million at year-end 2025. Total debt was about $957 million, with $200 million of 4.24% senior notes due December 2026 that management expects to address in its capital plans.

04—Continue

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