CURTISS WRIGHT CORP Q3 FY2025 earnings call

• Continues to deliver on Pivot to Growth strategy with top line accelerating. - Strong operational performance with revenue up 9% YOY, operating income up 14% YOY, operating margin at 19.6%. - Order book new orders up 8%, backlog up 14% YTD to over $3.9B. - Growth in A&D markets with strong demand in commercial aerospace and naval defense; commercial markets saw growth in nuclear orders and aftermarket equipment. - Raised full year 2025 guidance for sales, operating income, and EPS.

Aerospace & Industrial: Sales increased 8%, operating income grew 17% with operating margin expanding 140 basis points to 18.6%. Defense Electronics: Sales growth of 4%, operating margin was 29.2%, up 270 basis points. Naval & Power: Sales increased 12%, operating income grew 14% with operating margin at 16.6%. Revenue contribution details were not explicitly given in terms of percentages but each segment's financial performance was outlined.

• Sales expected to increase 10%-11%. - Operating income to grow 16%-19%. - Adjusted diluted EPS range $12.95-$13.20 (19%-21% growth). - Free cash flow expected $520M-$535M. - Expect margin expansion with operating margin expected over 18.5%.

• Impact of government shutdown and continuing resolution on timing of orders in some segments. - Uncertainty in revenue recognition timing for certain products like AP1000 orders. - Macro challenges affecting global industrial vehicle markets for the general industrial segment.

Q: Could you pick up where you left off on the AP1000 and speak to the shipset content?

A: Lynn Bamford mentioned about $10M to $20M of incremental content historically, and they're aiming to double or triple that.

Q: Could you provide bookings by segment and comment on Defense Electronics and government shutdown?

A: Lynn and Chris Farkas discussed bookings, with 1.1x book-to-bill, naval defense less affected, Defense Electronics had orders pushed out during CR but pipeline is healthy.

Q: On AP1000 pricing and potential orders, when would revenues be recognized?

A: Chris Farkas said it depends on timing of receipts and long lead materials, could be accelerated into tighter window than previous bell curves.

Q: On industrial vehicles, color on regions driving improvement?

A: K. Farkas mentioned North American on-highway challenges but some opportunities in Europe, strong October orders.

Q: On Switzerland business and Turret Drive stabilization?

A: Lynn Bamford talked about the business having visibility with key customers like Rheinmetall and participation in U.S. Army's XM30 combat vehicle program.