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 (up 11%) and diluted EPS of $2.97 (up 17%).

• Free cash flow was $163 million, with 142% conversion; new orders totaled $860 million, up 2% year-over-year, and backlog hit a record $3.3 billion, up 16% year-to-date.

• Record bookings in Defense Electronics and a $100 million expansion of the share repurchase program were completed, with $113 million repurchased in Q3 and a $150 million target for 2024.

• 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.

• The 2024 Restructuring Program incurred $3 million in pre-tax charges in Q3, expected to yield $10 million in annual cost savings by mid-2025.

Financial highlights

• Q3 2024 net sales: $798.9 million (+10% YoY); operating income: $149 million (+11% YoY); net earnings: $111.2 million (+15% YoY); diluted EPS: $2.97 (adjusted), $2.89 (reported).

• Operating margin improved to 18.7% (adjusted, +20 bps YoY); reported margin: 18.1%.

• Book-to-bill ratio was 1.1x, with a record backlog over $3.3 billion.

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

• Adjusted results exclude one-time items such as restructuring and acquisition-related costs.

Outlook and guidance

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

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

• Aerospace and defense markets projected to grow 10%-12% in 2024; commercial markets to grow 1%-3%.

• General industrial market outlook reduced to a 2%-4% decline, but sequential improvement expected in Q4.

• No material changes in risk factors or market risk anticipated for the remainder of 2024.