Curtiss-Wright (CW) Q4 Earnings Lag Estimates, Sales Rise Y/Y
Curtiss-Wright Corporation CW reported fourth-quarter 2022 adjusted earnings of $2.92 per share, which missed the Zacks Consensus Estimate of $3.02 by 3.3%. However, the bottom line rose 21% on a year-over-year basis.
For the full-year 2022, CW reported adjusted earnings of $8.13 per share, which missed the Zacks Consensus Estimate of $8.23 per share by 1.2%. However, adjusted earnings increased 11% year over year.
In the quarter under review, the company’s net sales of $758 million went up 16% year over year. Also, the top line surpassed the Zacks Consensus Estimate of $748 million by 1.4%.
For the full-year 2022, net sales came in at $2.55 billion, in line with the Zacks Consensus Estimate. However, net sales increased 4% year over year.
The operating income of $160 million surged 24% year over year. The adjusted operating margin expanded 140 basis points (bps) to 21.1%, driven by favorable overhead absorption on higher revenues in all three segments and the benefits of restructuring and ongoing company-wide operational excellence initiatives.
Curtiss-Wright’s total backlog at the end of 2022 was $2.6 billion, up 19% from the 2021 level, reflecting strong demand in the Defense and Commercial Aerospace markets. New orders of $714 million increased 5% in the fourth quarter compared with the prior-year period, driven by solid demand in the aerospace & defense market and commercial market demand.
Curtiss-Wright Corporation Price, Consensus and EPS Surprise
Curtiss-Wright Corporation price-consensus-eps-surprise-chart | Curtiss-Wright Corporation Quote
Aerospace & Industrial: Sales in this segment improved 8% year over year to $223 million, primarily attributable to higher commercial aerospace market revenues. The upside in revenues was mainly due to the strong demand for actuation and sensor products.
Further, higher general industrial market revenues, driven by the increased sale of industrial vehicle products, fueled the sales performance of the segment and increased sales of surface treatment services.
While the operating income increased 2% to $41 million, the operating margin contracted 100 bps to 18.5%. The downside in the margin was mainly due to an unfavorable mix of actuation products, partially offset by favorable absorption of strong sales and the benefits of its ongoing operational excellence and pricing initiatives.
Defense Electronics: Sales in this segment increased 18% year over year to $236 million. This increase was due to strong growth in defense market sales.
The operating income increased 33% to $70 million, while the operating margin increased 320 bps to 29.7%. The expansion can be attributed to the strong absorption of higher defense revenues.
Naval & Power: Sales in this segment increased 20% year over year to $298 million due to the favorable impact of the arresting system acquisition and higher revenues from the Columbia-class submarine programs.
The unit’s operating income increased 26% to $60 million. The operating margin expanded 100 bps to 20.3%. This acceleration was due to the favorable absorption of higher organic revenues, a solid contribution from the arresting systems acquisition and the benefits of restructuring initiatives.
CW’s cash and cash equivalents as of Dec 31, 2022 were $256.9 million compared with $171 million as of Dec 31, 2021.
The long-term debt was $1,051.9 million as of Dec 31, 2022 compared with $1,050.6 million as of Dec 31, 2021.
The operating cash outflow totaled $292 million at the end of the fourth quarter of 2022 compared with $232 million in the prior-year period.
Adjusted free cash flow at the end of the reported quarter was $299 million compared with the year-ago period’s $219 million.
Curtiss-Wright initiated its financial guidance for 2023. The company now expects adjusted earnings in the band of $8.65-$8.90. The Zacks Consensus Estimate for the company’s full-year earnings is pegged at $8.65 per share, which lies at the lower end of the company’s guided range.
The company expects sales in the range of $2,655-$2,710 million. The Zacks Consensus Estimate for its full-year sales is pegged at $2.68 billion, in line with the midpoint of the company’s guided range.
Curtiss-Wright currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
Spirit AeroSystems Holdings, Inc. SPR reported a fourth-quarter 2022 adjusted loss of $1.46 per share, wider than the Zacks Consensus Estimate of a loss of 31 cents. The bottom line also widened significantly from the year-ago quarter’s loss of 84 cents per share.
Total revenues of $1,320 million lagged the Zacks Consensus Estimate of $1,378 million by 4.2%. However, the top line rose 23% on a year-over-year basis, driven by the higher production deliveries of the Boeing 737 and increased Defense and Space revenues.
Leidos Holdings, Inc.’s LDOS fourth-quarter 2022 adjusted earnings of $1.83 per share beat the Zacks Consensus Estimate of $1.61 by 13.7%. The bottom line also improved 17% from the $1.56 per share registered a year ago.
Leidos Holdings generated total revenues of $3,697 million in the quarter under consideration, exceeding the Zacks Consensus Estimate of $3,609 million by 2.4%. The top line also improved 5.9% year over year.
Huntington Ingalls Industries, Inc.’s HII fourth-quarter 2022 earnings of $3.07 per share increased 2.7% from the $2.99 reported in the prior-year quarter. However, the bottom line missed the Zacks Consensus Estimate of $3.14 by 2.2%.
Total revenues came in at $2,812 million, beating the Zacks Consensus Estimate of $2,691.6 million by 4.5%. The top line also improved 5% from $2,677 million in the year-ago quarter.
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