Curtiss-Wright (CW) Q2 2024 earnings summary

Executive summary

• Q2 2024 sales reached $785 million, up 11% year-over-year, with strong growth in Defense Electronics, Naval & Power, and Aerospace & Defense markets.

• Operating income rose 16% to $133 million, and adjusted diluted EPS increased 24% to $2.67, exceeding expectations.

• Free cash flow was $100 million with a 97% conversion rate; new orders surged 18% to $995 million, driving a record $3.2 billion backlog.

• Full-year 2024 guidance was raised for sales, EPS, and free cash flow, supported by robust order activity and a major acquisition.

• Launched a restructuring program and announced the $200 million acquisition of Ultra Energy, expanding the commercial nuclear and defense portfolio.

Financial highlights

• Q2 sales up 11% year-over-year to $785 million; operating income up 16% to $133 million; adjusted EPS up 24% to $2.67.

• Free cash flow at $100 million, with conversion near 97%.

• Book-to-bill ratio at 1.3x; backlog now over $3.2 billion.

• Six-month net sales increased 12% year-over-year to $1.50 billion.

• Dividend increased to $0.21 per share in Q2; share repurchases ongoing.

Outlook and guidance

• Full-year 2024 sales growth expected at 6%-8%; operating margin expansion targeted at 17.4%-17.6%.

• Diluted EPS guidance raised to $10.40-$10.65, up 11%-14% year-over-year.

• Free cash flow guidance increased to $425-$445 million, with conversion rate projected above 105%.

• Segment guidance: Aerospace & Industrial sales up 4%-6%, Defense Electronics up 8%-10%, Naval & Power up 5%-7%.

• 68% of 2024 revenues projected from aerospace & defense markets.