Curtiss-Wright's (CW) Q3 Earnings Beat, '23 Sales View Up
Shares of Curtiss-Wright Corporation CW gained 1.9% to reach $204.28 on Nov 2 following the release of its third-quarter 2023 results.
The company reported third-quarter adjusted earnings per share (EPS) of $2.54, which surpassed the Zacks Consensus Estimate of $2.42 by 5%. The bottom line improved 22.7% from the year-ago quarter’s tally of $2.07.
The company reported a GAAP EPS of $2.51, up from $1.91 in the year-ago quarter.
Operational Performance
In the quarter under review, the company’s net sales of $724.3 million went up 14.9% year over year. Also, the top line surpassed the Zacks Consensus Estimate of $684.9 million by 5.8%.
The company reported operating income of $132.5 million in the third quarter, soaring 23.2% year over year. The operating margin increased 120 basis points (bps) to 18.3%.
Curtiss-Wright’s total backlog at the end of the third quarter was $2.9 billion, up from $2.8 billion at the end of the second quarter.
New orders of $846 million increased 3% year over year in the third quarter, driven by the strong demand from Aerospace & Defense and Commercial markets.
Curtiss-Wright Corporation Price, Consensus and EPS Surprise
Curtiss-Wright Corporation price-consensus-eps-surprise-chart | Curtiss-Wright Corporation Quote
Segmental Performance
Aerospace & Industrial: Sales in this segment improved 3.3% year over year to $220.3 million. The upside was driven by higher OEM sales of actuation, and sensors products and surface treatment services on narrowbody and widebody platforms, as well as increased sales of industrial automation products and surface treatment services.
The operating income decreased 0.2% to $39 million, while the operating margin reduced 60 bps to 17.7%.
Defense Electronics: Sales in this segment increased 34.2% year over year to $216.3 million. This rise was due to increased sales of embedded computing and flight test instrumentation equipment on various domestic and international platforms, and higher sales of tactical battlefield communications equipment.
The operating income increased 53.6% to $56.2 million, while the operating margin increased 330 bps to 26%.
Naval & Power: Sales in this segment increased 12.3% year over year to $287.7 million, driven by solid contributions from the arresting systems acquisition and strong demand from international customers. Moreover, higher revenues from Columbia-class and Virginia-class submarines, as well as strong growth in industrial valve sales in the process market and solid growth in commercial nuclear aftermarket revenues, contributed to this unit’s top-line growth.
The operating income increased 14.7% to $47.7 million, while the operating margin increased 40 bps to 16.6%.
Financial Update
CW’s cash and cash equivalents as of Sep 30, 2023, were $148.8 million compared with $256.9 million as of Dec 31, 2022.
The long-term debt was $1,050.7 million as of Sep 30, 2023, compared with $1,051.9 million as of Dec 31, 2022.
The operating cash inflow totaled $165.7 million at the end of the third quarter of 2023 compared with $2.4 million in the prior-year period.
The adjusted free cash flow at the end of the reported quarter was $143.7 million against free cash outflow of $3.2 million recorded a year ago.
2023 Guidance
Curtiss-Wright raised its financial guidance for 2023. The company now expects to generate adjusted earnings in the band of $9.00-$9.20 compared with the earlier guidance of $8.90-$9.15. The Zacks Consensus Estimate for the company’s full-year earnings is pegged at $9.12 per share, which is higher than the mid-point of CW’s guided range.
Curtiss-Wright now expects sales in the range of $2,765-$2,815 million, up from the prior guidance of $2,730-$2,790 million. The Zacks Consensus Estimate for its full-year sales is pegged at $2.77 billion, lower than the mid-point of company’s guided range.
Zacks Rank
Curtiss-Wright currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
Teledyne Technologies Inc. TDY reported third-quarter 2023 adjusted earnings of $5.05 per share, which beat the Zacks Consensus Estimate of $4.75 by 6.3%. The bottom line also improved 11.2% from $4.54 recorded in the year-ago quarter.
Total sales were $1,402.5 million, which missed the Zacks Consensus Estimate of $1,426.3 million by 1.7%. The top line, however, grew 2.9% from $1,363.6 million reported in the year-ago quarter.
L3Harris Technologies, Inc. LHX reported third-quarter 2023 adjusted earnings (from continuing operations) of $3.19 per share, which beat the Zacks Consensus Estimate of $3.06 by 4.2%. However, the bottom line decreased 2.1% from the year-ago quarter’s reported figure.
The third-quarter revenues totaled $4,915 million, which beat the Zacks Consensus Estimate of $4,819 million by 2%. The figure also rose 15.8% from the year-ago quarter’s figure of $4,246 million.
Northrop Grumman Corp. NOC reported third-quarter 2023 earnings of $6.18 per share, which beat the Zacks Consensus Estimate of $5.81 by 6.4%. The bottom line also increased 5% from $5.89 per share recorded in the year-ago quarter.
In the third quarter, total sales of $9.78 billion beat the Zacks Consensus Estimate of $9.67 billion by 1.1%. The top line also increased 9% from $8.97 billion in the year-ago quarter.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Northrop Grumman Corporation (NOC) : Free Stock Analysis Report
Teledyne Technologies Incorporated (TDY) : Free Stock Analysis Report
Curtiss-Wright Corporation (CW) : Free Stock Analysis Report
L3Harris Technologies Inc (LHX) : Free Stock Analysis Report
