Curtiss-Wright(CW) - 2025 Q4 - Annual Results

Financial Performance - Fourth quarter 2025 reported sales reached $947 million, a 15% increase year-over-year, with operating income of $182 million and an operating margin of 19.2%[6] - Full-year 2025 sales totaled $3.5 billion, up 12%, with operating income of $634 million and diluted EPS of $12.87, reflecting a 21% growth in adjusted diluted EPS[6] - Adjusted operating income for the fourth quarter was $187 million, a 14% increase, with an adjusted operating margin of 19.7%[6] - Total net sales for Q4 2025 reached $946.98 million, a 15% increase from $824.31 million in Q4 2024[21] - Gross profit for the year ended December 31, 2025, was $1.30 billion, up from $1.15 billion in 2024, reflecting a strong performance[21] - Net earnings for Q4 2025 were $137.00 million, compared to $117.85 million in Q4 2024, representing a 16% year-over-year growth[21] - Basic earnings per share increased to $3.71 in Q4 2025 from $3.11 in Q4 2024, marking a 19% rise[21] - Operating income for the same period was $650,994, up 19% from $545,866 in 2024, with an operating margin of 18.6%[29] - Diluted earnings per share (EPS) for the year ended December 31, 2025, were reported at $12.87, up from $10.55 in 2024, reflecting a 22% increase[31] Cash Flow and Investments - The company achieved record free cash flow of $554 million for the full year, representing a 111% free cash flow conversion rate[5] - Free cash flow for the year ended December 31, 2025, was $553.7 million, up from $483.3 million in 2024, indicating a year-over-year increase of 14.5%[36] - Net cash provided by operating activities for the year ended December 31, 2025, was $643.4 million, an increase from $544.3 million in 2024, representing a growth of 18.3%[36] - The company repurchased approximately 934,000 shares for $465 million during the full year 2025[14] - Free cash flow for 2026 is guided to be between $575 million and $595 million, reflecting a year-over-year increase of approximately $25 million compared to 2025[39] Sales and Orders - New orders for the fourth quarter amounted to $1.1 billion, an 18% increase, contributing to a full-year total of $4.1 billion, which is a 10% increase from the previous year[14] - The backlog as of December 31, 2025, was $4.1 billion, reflecting an 18% increase compared to the prior year[14] - The Aerospace & Defense (A&D) market sales increased by 16%, while the Commercial market sales rose by 13% in the fourth quarter[8] - The company achieved a total sales growth of 15% across all segments, with Defense Electronics growing by 17% and Naval & Power by 21% year-over-year[27] - Total sales for the year ended December 31, 2025, reached $3,498,372, representing a 12% increase from $3,121,189 in 2024[29] - Total commercial sales for the year ended December 31, 2025, were $1,047,280, reflecting a 10% increase from $951,289 in 2024[30] Future Projections - For 2026, the company anticipates total organic sales growth of 6% to 8%, with operating margin expansion of 30 to 60 basis points, and diluted EPS growth of 11% to 15%[7] - The 2026 financial guidance includes total sales projected between $3,710 million and $3,765 million, with free cash flow expected to be between $575 million and $595 million[15] - The operating income for 2026 is expected to range from $699 million to $717 million, which is an increase of 8% to 11% from the previous year[38] - Diluted earnings per share for 2026 are projected to be between $14.70 and $15.15, representing a growth of 11% to 15% compared to 2025[38] - The Aerospace & Defense segment is expected to grow by 5% to 7% in 2026, contributing 70% to total sales[41] - The Naval & Power segment is projected to grow by 8% to 9% in 2026, with sales expected to reach between $1.625 billion and $1.645 billion[38] Expenses and Liabilities - Research and development expenses for the year totaled $95.16 million, slightly up from $91.65 million in 2024, indicating continued investment in innovation[21] - Current liabilities increased to $1.41 billion in 2025 from $1.10 billion in 2024, primarily due to higher accounts payable and deferred revenue[23] - The effective tax rate for 2026 is expected to remain stable at 21.5%[38] - The company plans to increase capital expenditures in 2026 to support growth and efficiency initiatives[39]