Q2 2026 Curtiss-Wright Corp Earnings Call Transcript
Key Points
- Curtiss-Wright Corp (CW) delivered excellent second quarter results that exceeded expectations, with sales up 5% year-over-year and diluted EPS up 15%.
- The company raised its full-year 2026 earnings guidance, reflecting strong first-half results, record backlog, and a positive outlook for the balance of the year.
- Defense and Electronics segment achieved a record performance with orders growing nearly 50% year-over-year, driven by significant awards for turret drive stabilization systems, tactical communication equipment, and Golden Dome development contracts.
- Free cash flow generation was strong, with $160 million generated in Q2, representing a 37% year-over-year improvement and a cash conversion rate of 116%.
- The company is well-positioned for long-term growth in the commercial nuclear market, with an $80 million investment to expand its Pennsylvania facility and anticipation of supporting the build-out of AP1000 reactors.
- Defense Electronics segment sales were down 3% year-over-year due to the timing of prior year orders for tactical communications equipment.
- Naval and Power segment orders were down year-over-year in Q2, principally due to the timing of Naval Defense orders on submarine programs.
- The company expects third-quarter operating income and margin to be flat sequentially, due to timing of revenues, unfavorable mix in Defense Electronics, and higher R&D investments.
- Supply chain pressures have increased in the first half of 2026, with challenges in electronics and rare earth materials, requiring careful management and inventory positioning.
- The M&A market is described as 'frothy' with high multiples, making it challenging to find strategic and financially fitting acquisition targets, despite active pursuit.
Welcome to the Curtiss-Wright second quarter 2026 earnings conference call. (Operator Instructions)
I would now like to turn the call over to Jim Ryan, Vice President of Investor Relations.
Thank you, Angela, and good morning, everyone. Welcome to Curtiss-Wright's second quarter 2026 earnings conference call. Joining me on the call today are Chair and Chief Executive Officer, Lynn Bamford; and Executive Vice President and Chief Financial Officer, Chris Farkas. A copy of today's financial presentation and the press release are available in the Investor Relations section of our website. A replay of this webcast will also be available on our website.
Our discussion today includes certain projections and forward-looking statements that are based on management's current expectations and are not guarantees of future performance. We detail those risks and uncertainties associated with our forward-looking statements in our public filings with the SEC. As a reminder, the
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