Curtiss-Wright Corporation ( CW Quick Quote CW - Free Report) declined 6.7% to reach $137.25 on May 9, reflecting investors’ disappointment following its first-quarter results.
The company reported first-quarter 2022 adjusted earnings of $1.31 per share, which surpassed the Zacks Consensus Estimate of $1.19 by 10.1%. However, the bottom line dropped 13.2% on a year-over-year basis.
Excluding one-time items, the company reported GAAP earnings of $1.05 per share compared with $1.45 reported in the year-ago quarter.
In the quarter under review, the company’s net sales of $559.5 million went down 6.3% year over year. The top line also missed the Zacks Consensus Estimate of $565 million by 1%.
Gross profit dropped 4% year over year to $201.4 million. Operating income of $60.5 million plunged 28.9% from $85.1 million a year ago.
Curtiss-Wright’s total backlog at the end of first-quarter 2022 was $2.3 billion. New orders of $634 million increased 12% in the first quarter when compared with the prior-year period, driven by solid demand for the company’s naval defense and commercial aerospace products as well as for industrial vehicle products.
Segmental Performance Aerospace & Industrial: Sales in this segment improved 6% year over year to $191.1 million, primarily attributable to higher general industrial market revenues driven by a continued strong rebound in demand for actuation and sensors products and surface treatment services on narrowbody platforms. Also, higher sales of actuation products and surface treatment services on the F-35 program contributed to this segment’s top-line growth. Further, higher general industrial market revenues buoyed by increased sales of industrial vehicle products boosted this segment’s first-quarter sales.
While operating income increased 31% to $24.9 million, the operating margin expanded 240 basis points (bps) to 13%. The upside was driven by strong absorption on higher sales and the benefits of this segment’s ongoing operational excellence as well as restructuring initiatives.
Defense Electronics: Sales in this segment declined 21% year over year to $143.1 million. This decline was on account of ongoing supply chain headwinds and the delayed signing of the fiscal 2022 defense budget. Also, the timing of revenues on the Virginia-class submarine program and various surface ships hurt the top-line performance of this segment.
Operating income plunged 31% to $23.3 million while operating margin contracted 390 bps to 16.3%. The deterioration can be attributed to reduced absorption and an unfavorable mix on lower defense sales.
Naval & Power: Sales in this segment dropped 4% year over year to $225.3 million on account of lower revenues from the CVN-80 aircraft carrier and Virginia-class submarine programs.
The unit’s operating income declined 28% to $27.3 million. The operating margin contracted 410 bps to 12.1%. This deceleration was on account of unfavorable absorption on lower naval defense market revenues and an unfavorable mix in the power & process market.
Curtiss-Wright ended the first quarter of 2022 with cash and cash equivalents of $136.7 million, down from $171 million as of Dec 31, 2021.
Long-term debt was $967.7 million as of Mar 31, 2022, compared with $1,050.6 million as of Dec 31, 2021.
Operating cash outflow totaled $124.3 million during the first quarter of 2022 compared with $26.6 million in the prior-year period.
Adjusted free cash outflow at the end of the reported quarter was $112 million compared with the year-ago period’s $35.1 million.
Curtiss-Wright reiterated its financial guidance for 2022. The company still expects adjusted earnings in the range of $8.05-$8.25 per share.
The Zacks Consensus Estimate for the company’s full-year earnings is pegged at $8.13 per share, which lies below the mid-point of the company’s guided range.
The company maintained its adjusted sales expectation in the range of $2,530-$2,580 million in 2022. The Zacks Consensus Estimate for its full-year sales is pegged at $2.56 billion, almost in line with the midpoint of the company-guided range.
Curtiss-Wright currently carries a Zacks Rank #3 (Hold). You can see
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