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Curtiss-Wright (CW) Beats on Q3 Earnings, Lifts '18 EPS View
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Curtiss-Wright Corporation (CW - Free Report) reported third-quarter 2018 adjusted earnings of $1.70 per share, which surpassed the Zacks Consensus Estimate of $1.58 by 7.6%.
Excluding one-time items, the company reported GAAP earnings of $1.68 per share, which came in 17% higher than $1.43 registered in the year-ago quarter.
The year-over-year upside in bottom line was driven by higher operating income, lower interest expenses and a lower tax rate as well as a slightly lower share count.
Curtiss-Wright Corporation Price, Consensus and EPS Surprise
In the quarter under review, the company’s revenues of $595.4 million increased 5% year over year. The top-line figure, however, missed the Zacks Consensus Estimate of $626.9 million by 5%.
Curtiss-Wright’s total backlog at the end of third-quarter 2018 was $2 billion compared with backlog of $2.2 billion in the previous quarter.
Gross profit increased 7% to $222.5 million. Operating income of $97 million improved 5% from $92.4 million a year ago.
Segmental Performance
Commercial/Industrial: Revenues at this segment remained flat year over year at $295 million. Higher sales of sensors and controls products were offset by lower revenues resulting from FAA directives.
While operating income fell 4% to $51.7 million, operating margin contracted 70 basis points (bps) to 16.6%. The margin downside was on account of unfavorable mix and lower profitability for sensors and controls products,
Defense: Revenues at this segment declined 3% year over year to $138.4 million due to lower sales of embedded computing equipment on helicopter and unmanned aerial vehicle (UAV) platforms.
Operating income were flat at $33.6 million, while operating margin expanded 60 bps to 24.3%. The upside was primarily backed by favorable foreign currency translation.
Power: Revenues at this segment rose 23% year over year to $161.8 million on account of strong naval defense market sales that were driven by higher CVN-80 aircraft carrier revenues, solid DRG service center revenues along with higher revenues from the China Direct AP1000 program.
Adjusted operating income increased 66% to $29.5 million, while operating margin expanded 470 bps to 18.2%. Both the upsides can be attributed to higher sales and improved profitability on the China Direct AP1000 program.
Financial Update
Curtiss-Wright ended the third quarter with cash and cash equivalents of $245.9 million, down from $475.1 million as of Dec 31, 2017. Long-term debt summed $812.7 million compared with $814 million as of Dec 31, 2017.
Operating cash inflow from continuing operations totaled $72.3 million at the end of the third quarter compared with $101.4 million in the year-ago quarter.
Adjusted free cash flow at the end of the third quarter was $61.9 million compared with the year-ago quarter’s $89.8 million. During the quarter under review, the company repurchased 0.25 million shares worth $33 million.
Guidance
Curtiss-Wright updated its financial guidance for 2018. It expects to generate adjusted earnings per share in the range of $6.10-$6.25, higher than $6.00-$6.15 anticipated earlier. However, the company lowered its sales guidance to the band of $2,430-$2,470 million from $2,445-$2,485 million projected previously.
Free cash flow is anticipated in the range of $260-$280 million, up from $250-$270 million guided earlier. Adjusted free cash flow is expected in the range of $310-$330 million compared with prior guidance of $300-$320 million.
FLIR Systems’ third-quarter 2018 adjusted earnings of 57 cents per share came in line with the Zacks Consensus Estimate. Its revenues declined 6.4% year over year to $434.9 million.
Northrop Grumman Corporation (NOC - Free Report) delivered third-quarter 2018 earnings of $6.54 per share, beating the Zacks Consensus Estimate of $4.35 by 50.4%. The company recorded total revenues of $8.09 billion, marginally surpassing the Zacks Consensus Estimate of $8 billion by 1%.
Textron (TXT - Free Report) reported third-quarter 2018 adjusted earnings from continuing operations of 61 cents per share, which missed the Zacks Consensus Estimate of 76 cents by 19.7%. The bottom line also decreased 6.2% from 65 cents registered in the year-ago quarter.
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Curtiss-Wright (CW) Beats on Q3 Earnings, Lifts '18 EPS View
Curtiss-Wright Corporation (CW - Free Report) reported third-quarter 2018 adjusted earnings of $1.70 per share, which surpassed the Zacks Consensus Estimate of $1.58 by 7.6%.
Excluding one-time items, the company reported GAAP earnings of $1.68 per share, which came in 17% higher than $1.43 registered in the year-ago quarter.
The year-over-year upside in bottom line was driven by higher operating income, lower interest expenses and a lower tax rate as well as a slightly lower share count.
Curtiss-Wright Corporation Price, Consensus and EPS Surprise
Curtiss-Wright Corporation Price, Consensus and EPS Surprise | Curtiss-Wright Corporation Quote
Operational Performance
In the quarter under review, the company’s revenues of $595.4 million increased 5% year over year. The top-line figure, however, missed the Zacks Consensus Estimate of $626.9 million by 5%.
Curtiss-Wright’s total backlog at the end of third-quarter 2018 was $2 billion compared with backlog of $2.2 billion in the previous quarter.
Gross profit increased 7% to $222.5 million. Operating income of $97 million improved 5% from $92.4 million a year ago.
Segmental Performance
Commercial/Industrial: Revenues at this segment remained flat year over year at $295 million. Higher sales of sensors and controls products were offset by lower revenues resulting from FAA directives.
While operating income fell 4% to $51.7 million, operating margin contracted 70 basis points (bps) to 16.6%. The margin downside was on account of unfavorable mix and lower profitability for sensors and controls products,
Defense: Revenues at this segment declined 3% year over year to $138.4 million due to lower sales of embedded computing equipment on helicopter and unmanned aerial vehicle (UAV) platforms.
Operating income were flat at $33.6 million, while operating margin expanded 60 bps to 24.3%. The upside was primarily backed by favorable foreign currency translation.
Power: Revenues at this segment rose 23% year over year to $161.8 million on account of strong naval defense market sales that were driven by higher CVN-80 aircraft carrier revenues, solid DRG service center revenues along with higher revenues from the China Direct AP1000 program.
Adjusted operating income increased 66% to $29.5 million, while operating margin expanded 470 bps to 18.2%. Both the upsides can be attributed to higher sales and improved profitability on the China Direct AP1000 program.
Financial Update
Curtiss-Wright ended the third quarter with cash and cash equivalents of $245.9 million, down from $475.1 million as of Dec 31, 2017. Long-term debt summed $812.7 million compared with $814 million as of Dec 31, 2017.
Operating cash inflow from continuing operations totaled $72.3 million at the end of the third quarter compared with $101.4 million in the year-ago quarter.
Adjusted free cash flow at the end of the third quarter was $61.9 million compared with the year-ago quarter’s $89.8 million. During the quarter under review, the company repurchased 0.25 million shares worth $33 million.
Guidance
Curtiss-Wright updated its financial guidance for 2018. It expects to generate adjusted earnings per share in the range of $6.10-$6.25, higher than $6.00-$6.15 anticipated earlier. However, the company lowered its sales guidance to the band of $2,430-$2,470 million from $2,445-$2,485 million projected previously.
Free cash flow is anticipated in the range of $260-$280 million, up from $250-$270 million guided earlier. Adjusted free cash flow is expected in the range of $310-$330 million compared with prior guidance of $300-$320 million.
Zacks Rank
Curtiss-Wright currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
FLIR Systems’ third-quarter 2018 adjusted earnings of 57 cents per share came in line with the Zacks Consensus Estimate. Its revenues declined 6.4% year over year to $434.9 million.
Northrop Grumman Corporation (NOC - Free Report) delivered third-quarter 2018 earnings of $6.54 per share, beating the Zacks Consensus Estimate of $4.35 by 50.4%. The company recorded total revenues of $8.09 billion, marginally surpassing the Zacks Consensus Estimate of $8 billion by 1%.
Textron (TXT - Free Report) reported third-quarter 2018 adjusted earnings from continuing operations of 61 cents per share, which missed the Zacks Consensus Estimate of 76 cents by 19.7%. The bottom line also decreased 6.2% from 65 cents registered in the year-ago quarter.
3 Medical Stocks to Buy Now
The greatest discovery in this century of biology is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating revenue, and cures for a variety of deadly diseases are in the pipeline.
So are big potential profits for early investors. Zacks has released an updated Special Report that explains this breakthrough and names the best 3 stocks to ride it.
See them today for free >>