Curtiss-Wright (CW) Q3 2024 earnings summary

Executive summary

• Q3 2024 sales reached $799 million, up 10% year-over-year, with operating income of $149 million (adjusted, +11%) and diluted EPS of $2.97 (adjusted, +17%), driven by strong defense electronics and naval/power segments.

• Free cash flow was $163 million, with a 142% conversion rate, and new orders totaled $860 million, up 2% year-over-year.

• Backlog rose 16% year-to-date to a record $3.3 billion, with a book-to-bill ratio of 1.1x.

• Share repurchases reached $113 million in Q3, with a $150 million target for 2024 and expanded authorization.

• Comprehensive income for Q3 2024 was $141 million, up from $69 million in Q3 2023, mainly due to foreign currency gains and higher net earnings.

Financial highlights

• Q3 2024 net sales: $798.9 million (+10% YoY); operating income: $144.9 million (+9% YoY); net earnings: $111.2 million (+15% YoY); diluted EPS: $2.89 (reported), $2.97 (adjusted).

• Free cash flow: $163 million (+19% YoY); adjusted FCF conversion: 142%; capital expenditures: $15 million.

• Operating margin: 18.1% (reported), 18.7% (adjusted, +20 bps YoY); Defense Electronics margin: 26.5% (+50 bps YoY).

• Book-to-bill ratio: 1.1x; backlog: $3.3 billion (+16% YTD).

• Dividend increased to $0.21 per share in Q2 2024.

Outlook and guidance

• 2024 sales growth guidance raised to 7–9%, with adjusted operating income growth of 7–10% and diluted EPS guidance of $10.55–$10.75 (up 12–15% YoY).

• Free cash flow guidance raised to $430–$450 million, with conversion rate above 105%.

• Segment guidance: aerospace & industrial sales up 4–6%, defense electronics up 9–11%, naval & power up 8–9%.

• A&D end markets expected to grow 10–12% in 2024; commercial markets to grow 1–3%.

• Commercial nuclear market expected to achieve low double-digit growth for the year.