Curtiss-Wright Corporation

Curtiss-Wright reported second-quarter 2026 sales of $924 million, up 5% year over year. Operating income increased 12% year over year, driving 110 basis points of margin expansion and a 19.4% operating margin. Diluted EPS increased 15% year over year. Free cash flow was $160 million, up 37% year over year, with 115% cash conversion. Orders rose 8% in the quarter and 12% year to date, with book-to-bill in excess of 1.1x for the quarter and above 1.2x year to date. For full-year 2026, management raised sales guidance to 8% to 9%, operating margin guidance to 19.1% to 19.3%, diluted EPS guidance to $15.10 to $15.40, and free cash flow guidance to $585 million to $605 million, with free cash flow conversion expected to be approximately 105%.

Lynn Bamford said the company delivered excellent results that exceeded expectations and reflected the success of Curtiss-Wright’s pivot-to-growth strategy. She emphasized strong backlog, disciplined reinvestment, and a growing pipeline across defense, nuclear, aerospace, and industrial markets. Her tone was upbeat and confident, repeatedly framing 2026 as a record year and pointing to a strong setup for 2027 and beyond.

Chris Farkas focused on segment execution and the drivers behind the raised outlook. He noted A&I sales grew 12% with operating margin up 180 basis points, Defense Electronics sales were down 3% but margin reached 28%, and Naval & Power sales grew 7% with 80 basis points of margin expansion. On the full year, he highlighted expected operating income growth of 11% to 13%, margin of 19.1% to 19.3%, EPS of $15.10 to $15.40, and record free cash flow of $585 million to $605 million, despite nearly 30% higher capital expenditures tied to growth investments. He also said working capital as a percentage of sales should stay below 18%.

Analysts pressed on whether strong orders would translate into higher revenue, and management said Q3 looks strong but some Defense Electronics and tactical communications revenue is timing-related, with a bigger fourth quarter expected. Supply chain was another key concern; management said pressures have increased, especially in electronics and some rare-earth materials, but the company is largely secured for 2026 and is positioning inventory and suppliers for 2027. Questions also focused on growth durability, defense modernization opportunities like Golden Dome and UAVs, and M&A; management said the order book and end-market trends support growth, sees Golden Dome and nontraditional defense contractors as opportunities, and remains active but disciplined on acquisitions.