Curtiss-Wright Corp. (CW) benefits from its commercial nuclear aftermarket sales and shareholder-friendly initiatives, which have played a key role in the company's overall expansion. Given its strong growth, CW makes for a solid investment option in the Zacks Aerospace Defense Equipment industry.Let us focus on the factors that make this Zacks Rank #2 (Buy) company a strong investment pick at the moment.CW’s Growth Forecast & Surprise HistoryThe Zacks Consensus Estimate for CW’s 2025 earnings per share (EP ...

Technical Analysis - Curtiss-Wright Corporation (CW) has reached a key level of support, with its 50-day simple moving average crossing above its 200-day simple moving average, indicating a "golden cross" [1] - A golden cross is a bullish technical chart pattern that suggests a potential breakout, as it occurs when a stock's short-term moving average surpasses a longer-term moving average [1][2] Performance Metrics - Over the past four weeks, CW has gained 24%, indicating strong upward momentum [3] - The company currently holds a 2 (Buy) rating on the Zacks Rank, suggesting that the stock may be positioned for further gains [3] Earnings Outlook - There have been no earnings estimate cuts for CW in the current quarter, with four revisions higher in the past 60 days, indicating a positive earnings outlook [3] - The Zacks Consensus Estimate for CW has also increased, further supporting the bullish case for the stock [3][5]

Summary of Curtiss-Wright (CW) FY Conference Call - May 22, 2025 Company Overview - **Company**: Curtiss-Wright Corporation - **Industry**: Defense, Aerospace, and Nuclear sectors - **Key Executives Present**: Lynn Bemford (CFO), Chris Farkas (CEO) [3][6] Core Points and Arguments Growth Strategy - **Pivot to Growth Strategy**: The company is on track to achieve greater than 5% organic growth CAGR over the next three years, with a focus on defense, aerospace, and commercial nuclear sectors [10][12]. - **Defense Business Growth**: Projected mid to high single-digit growth, with double-digit growth achieved last year [10][11]. - **Commercial Aerospace**: Anticipated to exceed high single-digit growth rates as Boeing and Airbus ramp up production [11]. - **Commercial Nuclear**: Targeting low double-digit growth, with confidence in achieving this over the three-year horizon [12]. Financial Performance - **Operating Income Growth**: Expected to outpace sales growth, indicating continued operating margin expansion [14]. - **EPS Growth**: Targeting greater than 10% CAGR, supported by strong sales growth and capital allocation strategies [15]. - **Free Cash Flow**: On track to generate approximately $1 billion in free cash flow, with a long-term target of $1.3 billion [17]. Defense Sector Insights - **Defense Budget**: The company benefits from a $150 billion reconciliation bill on top of an $850 billion base budget, with a focus on shipbuilding and naval projects [18][19]. - **Golden Dome Initiative**: Expected to positively impact Curtiss-Wright, with partnerships enhancing capabilities in smart weaponry [20][21]. - **Acquisition of Industrial Base Funding**: Increased from $15 million to $21 million, indicating strong support from Navy customers [19]. International Exposure - **NATO Spending**: Increased military spending among NATO countries, with expectations for growth in international military sales, now approximately 10% of total portfolio [41][42]. - **Rearm Europe Program**: Seen as a positive development for future sales growth [43]. Commercial Nuclear Developments - **Nuclear Power Plants**: Anticipated doubling of the commercial nuclear segment from $300 million to $600 million by 2028, with significant growth expected from new builds in Poland and Bulgaria [51][52]. - **Flight Recorders**: Long-standing expertise in flight recorders is expected to drive growth, particularly with new FAA mandates [45][46]. Capital Allocation and M&A Strategy - **M&A Pipeline**: Strong pipeline with a focus on acquiring companies in Defense Electronics, Naval Safety, and Commercial Nuclear sectors [58]. - **Share Repurchase**: $700 million in stock repurchased over the past four years, with an expanded authorization of $534 million for future buybacks [60][61]. Research and Development - **Investment in R&D**: Over half of internal R&D spending is allocated to Defense Electronics, with ongoing partnerships (e.g., with NVIDIA) to enhance product development [38][39]. Additional Important Insights - **Operational Excellence**: The company has expanded its operating margin by 900 basis points over the last twelve years, demonstrating consistent performance [14][15]. - **Additive Manufacturing**: Growing capabilities in this area align with government contracting trends, which favor commercial pricing models [24][27]. - **SMR Development**: Engaged with major SMR providers, with potential content ranging from $20 million to $120 million per plant, indicating significant future revenue opportunities [63][64]. This summary encapsulates the key points discussed during the conference call, highlighting the company's growth strategies, financial performance, sector insights, and future opportunities.

Group 1: Momentum Investing Overview - Momentum investing involves following a stock's recent trend, with the aim of buying high and selling higher, capitalizing on established price movements [1] - The Zacks Momentum Style Score helps define momentum characteristics, with Curtiss-Wright (CW) currently holding a Momentum Style Score of A [2] - Style Scores complement the Zacks Rank, which has a strong track record of outperformance; CW has a Zacks Rank of 2 (Buy) [3] Group 2: Performance Metrics - CW shares have increased by 7.53% over the past week, outperforming the Zacks Aerospace - Defense Equipment industry, which rose by 0.82% [5] - Over the past month, CW's price change is 23.16%, compared to the industry's 8.54% [5] - In the last quarter, CW shares rose by 21.38%, and over the past year, they increased by 43.96%, while the S&P 500 moved -3.42% and 14.16%, respectively [6] Group 3: Trading Volume and Earnings Outlook - CW's average 20-day trading volume is 229,544 shares, indicating a bullish sign when combined with rising stock prices [7] - In the past two months, four earnings estimates for CW have increased, with no downward revisions, raising the consensus estimate from $12.20 to $12.55 [9] - For the next fiscal year, four estimates have also moved upwards, with no downward revisions during the same period [9] Group 4: Conclusion - Given the strong performance metrics and positive earnings outlook, CW is positioned as a 2 (Buy) stock with a Momentum Score of A, making it a promising near-term investment [11]

Market Overview - The compact rotary actuator market is segmented into various product types including pneumatic, electric, hydraulic, and others, with growth trends projected from 2020 to 2031 [2][3]. - The market is also categorized by applications such as industrial automation, medical devices, robotics, and others, with significant growth expected in these sectors [2][3]. Industry Development Status - The compact rotary actuator industry is characterized by specific development features and factors influencing its growth, including both favorable and unfavorable elements [3]. - Barriers to entry in the compact rotary actuator industry are identified, impacting new entrants [3]. Supply and Demand Analysis - Global supply and demand dynamics for compact rotary actuators are forecasted from 2020 to 2031, detailing production capacity, output, and utilization rates [3][4]. - The report includes a detailed analysis of the compact rotary actuator market in China, highlighting production capacity, output, and market demand trends [4][5]. Regional Market Analysis - The report provides a comprehensive analysis of the compact rotary actuator market across major regions, including North America, Europe, Asia-Pacific, Latin America, and the Middle East & Africa, with sales revenue and market share data from 2020 to 2031 [3][4][5]. - Specific insights into the sales volume and revenue trends for compact rotary actuators in North America, Europe, and Asia-Pacific are presented [4][5][6]. Competitive Landscape - The competitive landscape of the global compact rotary actuator market is analyzed, including market share and revenue data for major manufacturers from 2020 to 2025 [4][5][6]. - The report identifies leading manufacturers in the compact rotary actuator market, detailing their production capacities, sales volumes, and revenue [6][7]. Product Type Analysis - A detailed analysis of different product types of compact rotary actuators is provided, including sales volume and revenue forecasts from 2020 to 2031 [5][6]. - The report also discusses price trends for various product types in the compact rotary actuator market [5][6]. Application Analysis - The report examines the sales volume and revenue of compact rotary actuators across different applications, with forecasts extending to 2031 [6][7]. - Insights into market share and revenue trends for specific applications such as industrial automation and robotics are included [6][7]. Industry Development Environment - The report outlines the development trends and key driving factors for the compact rotary actuator industry, including a SWOT analysis of Chinese enterprises [6][7]. - An analysis of the policy environment affecting the compact rotary actuator industry in China is also provided [6][7]. Supply Chain Analysis - The supply chain for the compact rotary actuator industry is described, including key raw materials and major downstream customers [6][7]. - The report discusses procurement and production models within the compact rotary actuator industry [6][7].

Core Viewpoint - Curtiss-Wright Corporation reported strong first-quarter 2025 earnings, with adjusted EPS of $2.82, exceeding estimates and reflecting significant year-over-year growth in both sales and earnings [1][2][3]. Financial Performance - The company achieved net sales of $805.6 million, a 13% increase year over year, surpassing the Zacks Consensus Estimate of $767 million by 5% [3]. - Adjusted operating income was reported at $134 million, with an adjusted operating margin of 17.9% [3]. Backlog and Orders - Total backlog at the end of Q1 was $3.7 billion, an 8.8% increase from the end of 2024, driven by demand in aerospace, defense, and commercial markets [4]. - New orders reached $1 billion, up 13% year over year, supported by strong demand in naval defense, commercial aerospace, and commercial nuclear sectors [4]. Segment Performance - **Aerospace & Industrial**: Sales increased 4% to $227 million, driven by higher commercial aerospace sales and defense market revenues [5]. Adjusted operating income improved 15% to $50 million, with a margin expansion of 140 bps to 13.9% [6]. - **Defense Electronics**: Sales rose 16% to $245 million, fueled by ground and naval defense market revenues [7]. Operating income increased 40% to $67 million, with a margin expansion of 480 bps to 27.5% [8]. - **Naval & Power**: Sales grew 18% to $333 million, driven by demand for submarine programs and commercial nuclear products [9][10]. Adjusted operating income increased 28% to $45 million, with a margin expansion of 100 bps to 12.6% [11]. Financial Position - As of March 31, 2025, cash and cash equivalents were $226.5 million, down from $385 million at the end of 2024 [12]. Long-term debt remained flat at $0.96 billion [12]. - Net cash outflow from operating activities was $38.8 million, an improvement from $45.6 million in the prior year [12]. Adjusted free cash outflow was $54.5 million, compared to $57.7 million a year ago [12]. 2025 Guidance - The company raised its 2025 guidance for adjusted earnings to a range of $12.45-$12.80 per share, up from $12.10-$12.40 [13]. - Sales guidance was also increased to $3.37-$3.42 billion, compared to the previous range of $3.34-$3.39 billion [14]. - Free cash flow guidance was raised to $495-$515 million, up from $485-$505 million [14].

Financial Performance - Total sales for the three months ended March 31, 2025, increased by $92 million, or 13%, to $805.6 million compared to the prior year period[93] - Operating income for the same period rose by $29 million, or 29%, to $129.2 million, with an operating margin increase of 200 basis points to 16.0%[94] - Net earnings increased by $24.8 million, or 32%, to $101.3 million compared to the prior year period[93] - Comprehensive income for the three months ended March 31, 2025, was $120 million, compared to $61 million in the prior year[98] Orders and Sales Growth - New orders for the three months ended March 31, 2025, totaled $1,018 million, an increase of $116 million, or 13%, from the prior year[93] - Sales in the Aerospace & Industrial segment increased by $8 million, or 4%, to $227.2 million, driven by higher demand for actuation equipment[100] - Defense Electronics segment sales rose by $33 million, or 16%, to $245.2 million, primarily due to increased demand for embedded computing equipment[110] - Naval & Power segment sales increased by $51 million, or 18%, to $333.2 million, reflecting strong performance in naval defense orders[93] - Sales for the three months ended March 31, 2025, increased by $51 million, or 18%, to $333 million compared to the prior year period[115] - Sales in the Naval Defense market increased by $34 million, attributed to higher demand and timing of sales on submarine programs[115] - Total sales in Aerospace & Defense markets rose by $73 million, or 15%, to $563 million, with notable increases across all segments[122] - Sales in the Power & Process market increased by $20 million, or 15%, primarily due to acquisitions and higher commercial nuclear aftermarket sales[123] Operating Income and Margins - Operating income in the Defense Electronics segment increased by $19 million, or 40%, to $67.4 million, with an operating margin of 27.5%[111] - Operating income rose by $7 million, or 19%, to $42 million, with an operating margin of 12.6%, up 10 basis points from the previous year[118] Tax and Cash Flow - The effective tax rate for the three months ended March 31, 2025, was 19.0%, down from 22.7% in the prior year period[98] - Net cash used in operating activities decreased by $7 million from the prior year, reflecting higher cash earnings[127] - Net cash used in investing activities increased by $13 million, mainly due to additional consideration for the Ultra Energy acquisition[128] Debt and Credit Facilities - As of March 31, 2025, the Corporation had approximately $22 million in letters of credit and $728 million in unused credit available under its credit facility[130] - The Corporation's average debt outstanding was $1,021 million for the three months ended March 31, 2025, with a consistent average interest rate of 3.8%[129]

Financial Data and Key Metrics Changes - Sales for Q1 2025 reached $806 million, representing a 13% year-over-year increase or 11% on an organic basis, driven by growth in aerospace and defense markets [7][10] - Operating income increased by 34% year-over-year, resulting in a 260 basis points expansion in overall operating margin [8] - Diluted earnings per share (EPS) rose by 42% year-over-year, primarily due to higher aerospace and defense sales [8] - Free cash flow increased by 5% year-over-year, despite typically being a first-quarter outflow [8] - New orders increased by 13% year-over-year to a record of over $1 billion, resulting in a book-to-bill ratio of 1.26 times [8][10] Business Line Data and Key Metrics Changes - Aerospace and Industrial segment sales increased by 4%, with solid growth in defense markets, particularly in actuation equipment for F-35 and F-18 programs [12] - Defense Electronics segment saw a 16% sales growth, driven by embedded computing equipment sales supporting various C5ISR programs [13] - Naval and Power segment experienced an 18% sales growth, primarily due to higher revenue from naval defense platforms and contributions from acquisitions [15] Market Data and Key Metrics Changes - The overall backlog reached a record of over $3.6 billion, providing visibility and confidence in long-term growth [10] - The company expects total sales to grow by 8% to 9% in 2025, with strong growth anticipated in defense electronics and aerospace markets [10][24] - Commercial aerospace sales are projected to increase by 13% to 15%, driven by new cockpit voice recorder solutions [18] Company Strategy and Development Direction - The company is focused on operational growth and efficiency to expand margins and fund investments for profitable growth [6][29] - The strategy includes enhancing customer engagement and leveraging domain expertise in mission-critical technologies [5] - The company is well-positioned to capture growth trends in defense and commercial markets, with a strong emphasis on R&D and technological leadership [31][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver strong results despite macroeconomic uncertainties [6][29] - The company raised its full-year guidance for sales, operating margins, and EPS, reflecting improved outlooks in key markets [10][11] - Management highlighted the importance of adapting to challenges such as tariffs and supply chain issues while maintaining operational excellence [21][29] Other Important Information - Approximately 20% of the company's business is subject to tariffs, with an estimated $30 million impact for 2025, but mitigation strategies are in place [21][45] - The company anticipates a total annualized savings of approximately $12 million from its restructuring program [22] Q&A Session Summary Question: Can you provide more detail on the tariff impact? - Management discussed the dynamic situation regarding tariffs and the proactive measures taken to mitigate impacts, including operational adjustments and pricing strategies [41][43] Question: What drove the increase in commercial aerospace guidance? - The increase was attributed solely to new cockpit voice recorder business, with expectations for long-term revenue growth due to FAA mandates [49][51] Question: How supportive has the current administration been towards nuclear energy? - Management expressed cautious optimism regarding ongoing support for nuclear energy, citing positive developments in Poland and Bulgaria [62][63] Question: What is the outlook for shipbuilding and how does it affect the company? - Management noted that while shipbuilding programs take time, there are immediate opportunities for growth due to increased funding and support for the industrial base [66] Question: Can you comment on Defense Electronics margin performance? - Management acknowledged conservatism in guidance due to various factors but emphasized ongoing operational excellence initiatives that are expected to drive future growth [70][72]

Financial Data and Key Metrics Changes - Sales for Q1 2025 reached $806 million, representing a 13% year-over-year increase or 11% on an organic basis, driven by growth in aerospace and defense markets [6][10] - Operating income increased by 34% year-over-year, resulting in a 260 basis points expansion in overall operating margin [7][10] - Diluted earnings per share (EPS) rose by 42% year-over-year, primarily due to higher aerospace and defense sales [8][10] - Free cash flow increased by 5% year-over-year, despite typically being a first-quarter outflow [8][10] - New orders increased by 13% year-over-year, reaching a record of over $1 billion, resulting in a book-to-bill ratio of 1.26 times [8][10] Business Line Data and Key Metrics Changes - **Aerospace and Industrial Segment**: Sales increased by 4%, with strong demand in defense markets, particularly for actuation equipment supporting F-35 and F-18 programs [12][13] - **Defense Electronics Segment**: Sales grew by 16%, driven by embedded computing equipment sales for C5ISR programs and higher revenues from helicopter platforms [13][14] - **Naval and Power Segment**: Sales grew by 18%, primarily due to strong performance in naval defense and contributions from acquisitions in commercial nuclear and process markets [15][16] Market Data and Key Metrics Changes - The backlog reached a record of over $3.6 billion, providing visibility and confidence in long-term growth [10] - The company expects total sales to grow by 8% to 9% in 2025, with operating margins projected to increase by 80 to 100 basis points [10][11] - The commercial aerospace market is expected to see a sales increase of 13% to 15%, driven by new cockpit voice recorder solutions [19][20] Company Strategy and Development Direction - The company is focused on operational growth and commercial excellence to expand margins and fund investments for profitable growth [5][10] - The strategy includes leveraging strong domain expertise to enhance customer engagement and address challenging problems in mission-critical technologies [4][5] - The company is well-positioned to capture growth trends in defense, commercial aerospace, and nuclear markets, with a strong emphasis on R&D and technological leadership [32][34][37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver strong results despite macroeconomic uncertainties, citing quick adaptations to challenges faced in previous years [5][10] - The outlook for 2025 has been raised, with expectations for strong top and bottom line growth, driven by a robust order book and operational excellence initiatives [10][11] - Management highlighted the importance of the U.S. defense budget and ongoing support for nuclear energy as positive indicators for future growth [32][64] Other Important Information - Approximately 20% of the company's business is subject to tariffs, with an estimated $30 million impact for 2025, but mitigation strategies are in place [21][22] - The company anticipates a total annualized savings of approximately $12 million from restructuring efforts initiated in 2024 [23][24] - The company is targeting a free cash flow range of $495 million to $515 million for 2025, reflecting a 2% to 7% increase over 2024 [28][29] Q&A Session Summary Question: Can you provide more detail on the tariff impact? - Management discussed the dynamic situation regarding tariffs and highlighted successful mitigation strategies that have reduced potential impacts significantly [42][44][46] Question: Was the increase in commercial aerospace guidance related to Boeing's return to production? - The increase was primarily driven by new cockpit voice recorder sales, with ongoing conservatism due to supply chain uncertainties [50][51][52] Question: How supportive has the current administration been towards nuclear energy? - Management expressed cautious optimism regarding ongoing support for nuclear energy, citing positive developments in Poland and Bulgaria [62][64] Question: What is the outlook for shipbuilding and how does it affect the company? - Management noted that while shipbuilding programs take time, there are immediate opportunities for the company to secure work share in existing fleet operations [67][68] Question: Can you comment on the Defense Electronics margin performance? - Management acknowledged conservatism in guidance due to various factors but emphasized ongoing operational excellence initiatives that are expected to yield positive results [70][72][74]

Q1 2025 EARNINGS CONFERENCE CALL Conference Call Dial-in numbers: (800) 343-5172 (domestic) (203) 518-9856 (international) Conference code: CWQ125 May 8, 2025 1 Investor Day 2024 SAFE HARBOR STATEMENT Please note that the information provided in this presentation is accurate as of the date of the original presentation. The presentation will remain posted on this website from one to twelve months following the initial presentation, but content will not be updated to reflect new information that may become av ...