Shares of Curtiss-Wright Corporation CW lost 5.5% to reach $323.20 on Feb. 14, following the release of its fourth-quarter 2024 results.

The company reported adjusted earnings per share (EPS) of $3.27, which beat the Zacks Consensus Estimate of $3.08 by 6.2%. The bottom line also improved 3.5% from the year-ago quarter’s level of $3.16 per share.

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The company reported GAAP earnings of $3.09 per share, down 0.6% from the prior-year period’s $3.11.

The year-over-year downside in GAAP earnings can be attributed to lower operating income and higher interest expense incurred in the fourth quarter of 2024 compared with the year-ago quarter.

CW reported 2024 adjusted earnings of $10.90 per share, which were higher than the year-ago figure of $9.38.

CW’s Operational Performance

The company’s net sales of $824.3 million increased 4.9% year over year. Also, the top line surpassed the Zacks Consensus Estimate of $785 million by 4.9%.

The company reported revenues of $3.12 billion in 2024, which were higher than $2.85 billion in 2023.

The company reported an adjusted operating income of $163 million, which was in line with the prior-year quarter. The adjusted operating margin, however, contracted 100 basis points from 20.8% to 19.8%. This downside was primarily due to higher investments in research and development in all three segments, as well as an unfavorable mix in both the Defense Electronics and Naval & Power segments.

Curtiss-Wright’s total backlog at the end of the fourth quarter was $3.4 billion, which increased 20% from the 2023-end backlog figure. This improvement can be attributed to higher demand from both the aerospace and defense markets, as well as commercial markets.

New orders of $939 million rose 37% year over year, driven by the strong demand for the company’s aerospace and defense products.

Curtiss-Wright Corporation Price, Consensus and EPS Surprise

Curtiss-Wright Corporation price-consensus-eps-surprise-chart | Curtiss-Wright Corporation Quote

CW’s Segmental Performance

Aerospace & Industrial: Sales in this segment improved 5% year over year to $250.9 million. The upside was driven by higher commercial aerospace market sales, backed by strong demand as well as increased OEM sales of sensor products and surface treatment services on narrowbody and widebody platforms. Higher revenues from the aerospace defense market, driven by higher sales of CW’s actuation equipment principally on the F-35 and other fighter jet programs, also contributed favorably to this unit’s top line.

The adjusted operating income improved 22% to $54 million. Also, the unit’s adjusted operating margin expanded 280 bps to 21.3%. The increase was due to the favorable absorption of higher revenues and the benefits of the company’s restructuring and cost-containment initiatives.

Defense Electronics: Sales in this segment declined 5% year over year to $227.5 million. This decline was due to decreased sales in the Ground defense market, primarily on account of the unfavorable timing of sales of embedded computing equipment on the Stryker ground combat vehicle. Lower revenues from the naval defense market due to the unfavorable timing of sales of embedded computing equipment supporting various domestic and international programs also affected this segment’s top line.

The adjusted operating income decreased 20% to $55 million. The adjusted operating margin contracted 450 bps to 24.3%, on account of unfavorable absorption on lower defense revenues, an unfavorable mix of products and higher investment in research and development.

Naval & Power: Sales in this segment increased 12% year over year to $345.9 million, driven by higher demand and timing of revenues on the Virginia-class and Columbia-class submarine programs, as well as higher growth for aircraft handling systems to international customers. Increased commercial nuclear aftermarket sales supporting the maintenance of U.S. operating reactors also boosted this unit’s top-line growth.

The segment's adjusted operating income increased 11% to $66 million. The adjusted operating margin, however, contracted 20 bps to 19.1% due to an unfavorable mix of products and higher investment in research and development.

Financial Position of CW

CW’s cash and cash equivalents as of Dec. 31, 2024, were $385 million compared with $406.9 million as of Dec. 31, 2023.

The long-term debt was $0.96 billion as of the same date compared with $1.05 billion as of Dec. 31, 2023.

The net cash flow from operating activities amounted to $544.3 million during 2024 compared with $448.1 million in the prior year period.

The adjusted free cash flow at the end of Dec. 31, 2024, was $483.3 million compared with $413.4 million in the previous year.

2025 Guidance of CW

Curtiss-Wright issued its financial guidance for 2025.

CW expects to generate adjusted earnings in the band of $12.10-$12.40 per share. The Zacks Consensus Estimate for earnings is pegged at $11.92 per share, which lies below the company’s guided range.

The company expects GAAP earnings to be in the range of $11.80-$12.10 per share.

Curtiss-Wright expects to generate sales in the range of $3.34-$3.39 billion. The Zacks Consensus Estimate for sales is pegged at $3.35 billion, which lies below the mid-point of the company’s guided range.

The company expects to generate free cash flow in the band of $485-$505 million.

CW’s Zacks Rank

Curtiss-Wright currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Defense Releases

Teledyne Technologies Inc. TDY reported fourth-quarter 2024 adjusted earnings of $5.52 per share, which surpassed the Zacks Consensus Estimate of $5.23 by 5.5%. Total sales were $1.50 billion, which beat the consensus estimate of $1.45 billion by 3.7%.

Textron Inc. TXT reported fourth-quarter 2024 adjusted earnings of $1.34 per share, which beat the consensus estimate of $1.25 by 7.2%. The company reported total revenues of $3.61 billion, which missed the consensus estimate of $3.74 billion by 3.5%.

Hexcel Corporation HXL reported fourth-quarter 2024 adjusted earnings of 52 cents per share, which surpassed the Zacks Consensus Estimate of 51 cents by 2%. The company’s net sales totaled $473.8 million, which beat the consensus estimate of $471 million by 0.6%.

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