Curtiss-Wright Corporation Q2 FY26 Earnings Analysis

- Total sales expected to grow 7% to 8% in 2026, driven by defense and commercial nuclear markets (Page 3). - Aerospace Defense to grow 11% to 13%, benefitting from fighter jet programs and defense electronics demand (Page 3). - Naval Defense sales projected to grow 6% to 8%, driven by submarine production and aircraft carrier programs (Page 3). - Commercial Aerospace sales forecasted to increase 10% to 12% with OEM production ramp-ups (Page 3). - Power & Process sales expected to increase 13% to 15%, mainly from commercial nuclear growth and SMRs (Page 3). - General Industrial sales anticipated to be flat in 2026 but optimistic for growth starting 2027-28 (Pages 3 and 9). - Defense Electronics sales forecasted to grow 4% to 6%, despite timing delays in tactical communications (Page 3). - Strong book-to-bill ratios (1.3x to 1.5x) reflect order momentum supporting growth (Pages 2, 9, 10). - Expectation of increased defense spending including potential >$1 trillion budgets over next years (Page 10).

- Full year 2026 diluted EPS expected to grow 13% to 16%, ranging from $14.90 to $15.30 (Page 4). - Operating income growth forecasted at 9% to 12% overall, with operating margin improving to 19% to 19.2% (Page 4). - Aerospace & Industrial segment expects 13% to 15% growth in operating income and margin expansion of 100 to 120 basis points to 18.4%–18.6% (Page 4). - Naval and Power segment projected to grow sales 9% to 11%, with operating income growth of 13% to 15% and margin expansion of 40-60 basis points (Page 4). - Defense Electronics segment sales growth expected at 4% to 6%, with operating income growth in the same range, targeting record operating margin levels (Page 4). - Free cash flow guidance raised to $580 million to $600 million, up 5% to 8% (Page 4). - Strong order book and backlog support confidence in achieving record financial results (Pages 1, 4).

- In 2026, Curtiss-Wright is ramping up investments in people, systems, and capacity to increase throughput in naval businesses and prepare for future commercial nuclear awards. - The company is focused on efficient capital deployment and maintaining a healthy balance sheet while strategically pursuing acquisitions to accelerate top and bottom line growth. - Investments are being made to advance technology, particularly in defense electronics and critical aerospace technologies that can serve both commercial and military markets. - R&D investments are accelerating across the portfolio to maintain strong competitive positions. - Curtiss-Wright continues to pursue acquisitions in defense electronics and commercial nuclear segments, balancing strategic and financial filters to ensure strong ROI and accretive growth. - The company is investing in technologies for next-generation programs, including next-gen air superiority, tactical aircraft modernization, and SMR nuclear designs.

- Curtiss-Wright maintains a very healthy balance sheet with strong free cash flow. - The company has deployed $2.5 billion towards acquisitions since pivoting to growth. - Leverage is approaching record lows, and there is a fully untapped revolving credit facility with $3 billion borrowing capacity. - The focus is on efficient capital deployment with strategic acquisitions as the top priority to accelerate growth. - No specific mention of new fundraising through debt or equity in the provided transcript. - Capital allocation strategy balances acquisitions, organic investment, and returning capital to shareholders. - The company is disciplined in capital allocation, with no indication of imminent plans for new debt or equity issuance.

- Curtiss-Wright reported a record order book of nearly $4.3 billion, providing strong visibility and confidence in future top-line growth (Page 2). - Naval and Power segment achieved a 1.5x book-to-bill ratio with strong demand for nuclear propulsion equipment and commercial nuclear aftermarket products (Page 2). - Defense Electronics segment had its best order quarter since Q3 2024, with a Q1 order book up 18% year-over-year and a book-to-bill near 1.1x; April orders improved 46% year-over-year (Page 8). - Industrial vehicles market showed two strong quarters of bookings, indicating improved demand momentum (Page 9). - The company anticipates an order for reactor coolant pumps in 2026 but timing remains uncertain (Page 11). - Strong pipeline exists in defense electronics and naval businesses, with increased customer demand and multiple awards for modernization and next-gen platforms (Pages 2, 5, 6).