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Curtiss-Wright (CW) Beats on Q2 Earnings, Lifts '18 Guidance
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Curtiss-Wright Corporation (CW - Free Report) reported second-quarter 2018 adjusted earnings of $1.80 per share, beating the Zacks Consensus Estimate of $1.28 by 40.6%. The reported figure is also higher than the year-ago quarter’s adjusted earnings of $1.21 by 48.8%.
The year-over-year upside in earnings was driven by higher operating income, lower interest expense and a lower tax rate, as well as a slightly lower share count.
Excluding one-time items, the company reported GAAP earnings of $1.68 per share, which came in 48.6% higher than the year-ago quarter’s earnings of $1.13.
Operational Performance
In the quarter under review, the company’s revenues of $620.3 million increased 9.3% year over year. The top-line figure, however, missed the Zacks Consensus Estimate of $621 million by 0.2%.
Curtiss-Wright’s total backlog at the end of second-quarter 2018 was $2.2 billion, up 9% from 2017-end’s level.
Gross profit increased 16% to $226.5 million. Operating income of $102 million also improved 28% from $79.7 million a year ago.
Segmental Performance
Commercial/Industrial: The segment’s revenues were up 7% year over year to $312.5 million, driven by higher sales of actuation systems on fighter jets and increased sales on the CVN-79 Ford class aircraft carrier program. Also, solid demand for industrial vehicle products and increased sales of surface treatment services boosted this segment’s growth.
Operating income improved 19% to $51.7 million, while operating margin expanded 160 basis points (bps) to 16.6%. The upside was on account of higher sales and favorable overhead absorption for industrial vehicle products, naval valve products, sensors and controls products as well as surface treatment services. The company’s ongoing margin improvement initiatives boosted the unit’s performance, further.
Defense: The segment’s revenues were up 16% year over year to $146.2 million, courtesy of higher sales of flight test equipment serving the aerospace defense market, higher aircraft carrier revenues in the naval defense market and increased sales of avionics equipment in the commercial aerospace market.
Adjusted operating income improved 47% to $38.6 million, while operating margin expanded 560 bps to 26.4%. The upside was primarily backed by higher sales, favorable overhead absorption and favorable contract adjustments within its naval defense business. Also, ongoing margin expansion initiatives boosted the segment’s performance.
Power: The segment’s revenues rose 8% year over year to $162 million on account of strong naval defense market sales that were driven by higher CVN-80 aircraft carrier revenues and solid DRG service center revenues.
Adjusted operating income increased 10% to $26.2 million, while operating margin expanded 30 bps to 16.2%. The upside can be attributed to higher naval defense market sales and improved profitability on the China Direct AP1000 program.
Financial Update
Curtiss-Wright ended second-quarter with cash and cash equivalents of $218.9 million, down from $475.1 million as of Dec 31, 2017. Long-term debt was $813.1 million compared with $814 million as of Dec 31, 2017.
Operating cash inflow from continuing operations totaled $97.9 million at the end of the second quarter compared with $85.9 million in the year-ago quarter.
Free cash outflow at the end of the second quarter was $87.1 million compared with the year-ago quarter’s $73 million. During the second quarter, the company repurchased 0.26 million shares worth $34 million.
Curtiss-Wright Corporation Price, Consensus and EPS Surprise
Curtiss-Wright raised its financial guidance for 2018. It expects to generate adjusted earnings per share in the range of $6.00-$6.15, higher than $5.47-$5.62 anticipated earlier. Moreover, the company raised its sales guidance to the range of $2,445-$2,485 million compared with the prior guidance of $2,415-$2,455 million.
The company has also increased free cash flow guidance to the range of $250 to $270 million and adjusted free cash flow range of $300 to $320 million.
Lockheed Martin Corp. (LMT - Free Report) reported second-quarter 2018 adjusted earnings of $4.31 per share, beating the Zacks Consensus Estimate of $3.89 by 10.8%.
Textron Inc. (TXT - Free Report) reported second-quarter 2018 earnings from continuing operations of 87 cents per share, which surpassed the Zacks Consensus Estimate of 70 cents by 24.3%. The bottom line also increased 52.6% from 57 cents in the year-ago quarter.
Hexcel Corporation (HXL - Free Report) reported second-quarter 2018 adjusted earnings of 75 cents per share, which missed the Zacks Consensus Estimate of 76 cents by 1.3%. However, the bottom line improved 11.9% from the prior-year figure of 67 cents.
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Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Curtiss-Wright (CW) Beats on Q2 Earnings, Lifts '18 Guidance
Curtiss-Wright Corporation (CW - Free Report) reported second-quarter 2018 adjusted earnings of $1.80 per share, beating the Zacks Consensus Estimate of $1.28 by 40.6%. The reported figure is also higher than the year-ago quarter’s adjusted earnings of $1.21 by 48.8%.
The year-over-year upside in earnings was driven by higher operating income, lower interest expense and a lower tax rate, as well as a slightly lower share count.
Excluding one-time items, the company reported GAAP earnings of $1.68 per share, which came in 48.6% higher than the year-ago quarter’s earnings of $1.13.
Operational Performance
In the quarter under review, the company’s revenues of $620.3 million increased 9.3% year over year. The top-line figure, however, missed the Zacks Consensus Estimate of $621 million by 0.2%.
Curtiss-Wright’s total backlog at the end of second-quarter 2018 was $2.2 billion, up 9% from 2017-end’s level.
Gross profit increased 16% to $226.5 million. Operating income of $102 million also improved 28% from $79.7 million a year ago.
Segmental Performance
Commercial/Industrial: The segment’s revenues were up 7% year over year to $312.5 million, driven by higher sales of actuation systems on fighter jets and increased sales on the CVN-79 Ford class aircraft carrier program. Also, solid demand for industrial vehicle products and increased sales of surface treatment services boosted this segment’s growth.
Operating income improved 19% to $51.7 million, while operating margin expanded 160 basis points (bps) to 16.6%. The upside was on account of higher sales and favorable overhead absorption for industrial vehicle products, naval valve products, sensors and controls products as well as surface treatment services. The company’s ongoing margin improvement initiatives boosted the unit’s performance, further.
Defense: The segment’s revenues were up 16% year over year to $146.2 million, courtesy of higher sales of flight test equipment serving the aerospace defense market, higher aircraft carrier revenues in the naval defense market and increased sales of avionics equipment in the commercial aerospace market.
Adjusted operating income improved 47% to $38.6 million, while operating margin expanded 560 bps to 26.4%. The upside was primarily backed by higher sales, favorable overhead absorption and favorable contract adjustments within its naval defense business. Also, ongoing margin expansion initiatives boosted the segment’s performance.
Power: The segment’s revenues rose 8% year over year to $162 million on account of strong naval defense market sales that were driven by higher CVN-80 aircraft carrier revenues and solid DRG service center revenues.
Adjusted operating income increased 10% to $26.2 million, while operating margin expanded 30 bps to 16.2%. The upside can be attributed to higher naval defense market sales and improved profitability on the China Direct AP1000 program.
Financial Update
Curtiss-Wright ended second-quarter with cash and cash equivalents of $218.9 million, down from $475.1 million as of Dec 31, 2017. Long-term debt was $813.1 million compared with $814 million as of Dec 31, 2017.
Operating cash inflow from continuing operations totaled $97.9 million at the end of the second quarter compared with $85.9 million in the year-ago quarter.
Free cash outflow at the end of the second quarter was $87.1 million compared with the year-ago quarter’s $73 million. During the second quarter, the company repurchased 0.26 million shares worth $34
million.
Curtiss-Wright Corporation Price, Consensus and EPS Surprise
Curtiss-Wright Corporation Price, Consensus and EPS Surprise | Curtiss-Wright Corporation Quote
Guidance
Curtiss-Wright raised its financial guidance for 2018. It expects to generate adjusted earnings per share in the range of $6.00-$6.15, higher than $5.47-$5.62 anticipated earlier. Moreover, the company raised its sales guidance to the range of $2,445-$2,485 million compared with the prior guidance of $2,415-$2,455 million.
The company has also increased free cash flow guidance to the range of $250 to $270 million and adjusted free cash flow range of $300 to $320 million.
Zacks Rank
Curtiss-Wright currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Recent Defense Releases
Lockheed Martin Corp. (LMT - Free Report) reported second-quarter 2018 adjusted earnings of $4.31 per share, beating the Zacks Consensus Estimate of $3.89 by 10.8%.
Textron Inc. (TXT - Free Report) reported second-quarter 2018 earnings from continuing operations of 87 cents per share, which surpassed the Zacks Consensus Estimate of 70 cents by 24.3%. The bottom line also increased
52.6% from 57 cents in the year-ago quarter.
Hexcel Corporation (HXL - Free Report) reported second-quarter 2018 adjusted earnings of 75 cents per share, which missed the Zacks Consensus Estimate of 76 cents by 1.3%. However, the bottom line improved 11.9% from the
prior-year figure of 67 cents.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>