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Curtiss-Wright Receives Approval for $100M Share Repurchase

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Curtiss-Wright Corporation (CW - Free Report) announced that the board of directors has authorized the repurchase of additional $100 million of its common stock. $50 million of this additional share repurchase authorization will enable the company to expand share repurchase plans for 2018. The company will utilize the remaining $50 million share repurchase authorization to buyback more shares from January 2019.

Since 2013, the company has returned $710 million and has plans to make more share repurchases. Free cash flow for 2018 is expected in the range of $310-$330 million, which is likely to be utilized for additional buyback of shares.

Share Repurchase Plan of 2018

Periodic share repurchases enable the company to raise shareholders’ value. Share repurchases reduce the total outstanding shares of the company and boost earnings per share, which attracts investors.

During the first nine months ended September 30, 2018, the company used $79 million to repurchase approximately 608,000 outstanding shares. To raise shareholders’ value, the company paid $13.2 million as dividendover the same period.

The company will buyback shares worth $120 million in the fourth quarter of 2018, taking the total amount to $200 million for 2018.

Strong Performance to Support Buybacks

Rising global trade activities along with increasing need for replacing aging fleet with new airplanes have been fueling Curtiss-Wright’s commercial aerospace business. Moreover, persistent decline in oil prices have led to cheaper airfares for customers, which is boosting passenger growth. Steady increase in commercial aircraft deliveries is likely to cater to grow demand.

The total end market sales are expected to improve 7-9% in 2018, with organic growth in all end markets. The company has surpassed earnings estimates in the last eight quarters and is expected to sustain the performance in the upcoming quarters, courtesy of higher sales.

Price Movement

In the past month, shares of the company have lost 2.0% compared with the industry’s decline of 2.6%.

Zacks Rank & Key Picks

Curtiss-Wright carries a Zacks Rank # 3 (Hold).

A few better-ranked companies in the same sector are Aerojet Rocketdyne Holdings (AJRD - Free Report) , Raytheon Company (RTN - Free Report) and The Boeing Company (BA - Free Report) .

While Aerojet Rocketdyne sports a Zacks Rank #1 (Strong Buy), Raytheon and Boeing carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Aerojet Rocketdyne came up with average positive earnings surprise of 19.27% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has surged 43.3% to $1.82 in the past 90 days.

Raytheon delivered average positive earnings surprise of 6.71% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has moved up 1.8% to $10.10 cents in the past 90 days.

Boeing delivered average positive earnings surprise of 28.01% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has moved up 3% to $15.05 in the past 90 days.

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