Curtiss-Wright Raises Full-Year Guidance on Strong Defense Orders and Margin Expansion
The aerospace and defense supplier lifted its earnings outlook after second-quarter results beat expectations, with orders up 12% year-to-date and operating margins expanding across all segments.
Strong Quarter Prompts Guidance Raise
Curtiss-Wright Corporation reported second-quarter results that exceeded expectations and raised its full-year earnings guidance, citing strong demand across defense and commercial markets. Sales of $924 million grew 5% year-over-year, while operating income increased 12%, resulting in 110 basis points of operating margin expansion to 19.4% (earnings call, 2026-08-06).
Diluted earnings per share increased 15% year-over-year, while free cash flow of $160 million represented a 37% improvement and a conversion rate of 116% (earnings call, 2026-08-06). The company now projects full-year sales growth of 8% to 9%, up from previous guidance, with diluted EPS expected to grow 14% to 16%.
Defense Orders Surge Nearly 50%
The company's Defense and Electronics segment delivered what Chair and CEO Lynn Bamford called a "record performance," with orders growing nearly 50% year-over-year and up more than 30% year-to-date (earnings call, 2026-08-06). Notable bookings included significant awards for turret drive stabilization systems for international ground vehicles and tactical communication equipment supporting the U.S. Army, Marine Corps, and Air Force.
Overall, new orders increased 8% in the second quarter, yielding a book-to-bill ratio in excess of 1.1x. Year-to-date, orders are up 12%, exceeding sales growth of 9% and producing a book-to-bill above 1.2x (earnings call, 2026-08-06).
Margin Expansion Across Segments
CFO Chris Farkas detailed strong operational performance across all three business segments. The Aerospace and Industrial segment posted 25% operating income growth with margins up 180 basis points, driven by favorable absorption on higher revenues and restructuring savings (earnings call, 2026-08-06).
Defense Electronics delivered operating margin of 28%, up 120 basis points year-over-year, despite a 3% sales decline attributed to timing of tactical communications equipment orders. Naval and Power segment operating income grew 12%, generating 80 basis points of margin expansion on 7% sales growth (earnings call, 2026-08-06).
Raised Full-Year Outlook
For fiscal 2026, Curtiss-Wright now expects operating margin expansion of 50 to 70 basis points to a record 19.1% to 19.3%. The Aerospace and Industrial segment is projected to deliver operating margin expansion of 110 to 130 basis points to 18.5% to 18.7%, while Defense Electronics is expected to reach 27.5% to 27.7% (earnings call, 2026-08-06).
The company raised its aerospace defense revenue guidance to 12% to 14% growth, reflecting increased actuation and sensors equipment sales for domestic and international fighter jet programs. Naval and Defense guidance increased to 7% to 9% growth, driven by higher submarine production and aftermarket revenues supporting the CVN-75 refueling program (earnings call, 2026-08-06).
Free cash flow guidance was also raised, with the company continuing to expect conversion in excess of 105%. According to MarginX data, Curtiss-Wright is expected to report third-quarter results on November 4, 2026.
This article was generated by MarginX from the earnings call on 2026-08-06. It is not investment advice.