Curtiss-Wright Corporation

What they do

Curtiss-Wright designs and builds highly engineered, often safety-critical components and systems, including naval nuclear propulsion products, defense electronics such as turrets and tactical communications, electromechanical actuation, arresting systems, and commercial nuclear power equipment. It sells mainly to defense prime contractors, commercial aerospace OEMs, and energy and industrial companies, competing on technology and pricing. Manufacturing is concentrated in seven U.S. states plus Canada, Mexico, and the United Kingdom. The company reports three segments: Aerospace & Industrial, Defense Electronics, and Naval & Power.

Revenue drivers

• Naval & Power segment — Q2 2026 sales of $410 million, up 7% year over year; includes naval defense programs (Virginia-class submarine production timing, naval shipyard aftermarket) and power & process, including commercial nuclear products for next-generation advanced reactors, government nuclear, and aftermarket for operating reactors. Six-month segment sales of $813 million, up 13%.
• Aerospace & Industrial segment — Q2 2026 sales of $268 million, up 12%, with operating margin of 18.3%; driven by higher sales of electromechanical actuation equipment and commercial aerospace OEM growth. Growth in general industrial came from higher industrial vehicle product sales.
• Defense Electronics — Benefited from record order demand for defense electronics products, including ground defense turret technologies and tactical communications, per the Q2 2026 earnings release; Q2 2026 company-wide new orders of $1.1 billion reflected a 1.16x book-to-bill.
• Defense markets overall — Naval, aerospace, and ground defense collectively represented approximately 58% of annual net sales per the 10-K; the company supports over 400 platforms and 3,000 programs, with the largest share of defense revenue from long-term, primarily fixed-price contracts tied to U.S. Department of War budgets.

Recent performance

Second quarter 2026 reported sales were $924 million, up 5%, with operating income of $179 million, operating margin of 19.3%, and diluted EPS of $4.07. Adjusted operating income rose 12% to $179 million, adjusted operating margin expanded 110 basis points to 19.4%, and adjusted diluted EPS rose 15% to $3.72. New orders were $1.1 billion, up 8%, for a 1.16x book-to-bill, and free cash flow was $160 million, a 116% conversion rate. Operating margin expanded in all three segments, and six-month operating income rose 4% to $141 million on margins of 28.0% at the consolidated level shown in the 10-Q MD&A. Backlog strength was cited in naval defense, with new orders in the six months up $151 million on ground and naval defense order timing.

Strategy

Curtiss-Wright's stated "Pivot to Growth" strategy targets growth in revenue, operating income, operating margin, diluted EPS, and free cash flow. Management pursues both organic and inorganic growth, funding research and development while seeking acquisitions and shareholder returns through dividends and share repurchases. The company emphasizes cross-market opportunities between its defense and commercial technologies and a "One Curtiss-Wright" commercial excellence effort. Operational improvements are intended to fund continued R&D investment and margin expansion.

Risks

• Tariffs and macro uncertainty — The 10-K MD&A cites rising inflation and the implementation of tariffs as contributors to weakening economic growth rates in the company's major geographic markets.
• Defense budget and funding delays — The largest portion of defense revenue comes from long-term, primarily fixed-price contracts driven by U.S. DoW budgets; the 10-K notes that challenging budget years or funding delays can affect results, though portfolio breadth provides some insulation.
• Cybersecurity intrusion — The 10-K risk factors state the company stores sensitive intellectual property, proprietary business information, and confidential employee data, and that systems may be vulnerable to hacking, phishing, malware, and denial-of-service attacks despite firewalls and other measures.
• Program concentration and timing — Naval defense sales fluctuate with production timing on specific programs such as the Virginia-class submarine; Q2 2026 Naval & Power new orders fell $93 million primarily due to naval defense order timing.

Outlook

Management raised full-year 2026 guidance, now expecting sales growth of 8% to 9% (previously 7% to 8%), operating income growth of 11% to 13%, operating margin of 19.1% to 19.3%, and diluted EPS of $15.10 to $15.40. Free cash flow guidance was increased by $5 million to $585 to $605 million, still reflecting greater than 105% FCF conversion. The CEO cited record demand for defense electronics products and strong order growth in both A&D and commercial markets as support for the raised outlook.