CURTISS WRIGHT CORP Q1 FY2026 earnings call

• 2026 started highly productively with strong first quarter performance exceeding expectations, all segments had higher revenue and operating income growth. • Focus on innovation with incremental R&D investments. • Strong alignment with industry growth factors in A&D, commercial nuclear, and industrial markets. • Order book new orders increased 16% with 1.3 times book-to-bill ratio, each segment had mid-teens growth. • Defense electronic segment made strides past delays, naval and power had strong demand for nuclear propulsion and commercial nuclear aftermarket, A&I segment saw improvement in industrial vehicles order book.

Aerospace and Industrial: Overall sales increased 12%, operating income grew 24% with 150 basis points of operating margin expansion. Defense Electronics: Overall sales increased 5%, delivered a strong first quarter operating margin of 28.1% with 60 basis points year-over-year expansion. Naval and Power: Sales growth of 21% exceeded expectations, operating income grew 33% with 140 basis points of operating margin expansion.

• Raised full-year 2026 outlook, expects total sales to grow 7% to 8%, operating income growth to outpace sales growth with operating margin increase of 40 to 60 basis points to 19 to 19.2%, diluted EPS to grow 13% to 16%, free cash flow raised to $580 to $600 million. • Second quarter 2026 expected to have mid-single digits sales growth and high single digits plus operating income growth relative to Q2 2025, with improved profitability in A&I and Naval Empower segments, Defense Electronics segment in line with last year's Q2 results.

• Supply chain constraints, including in semiconductor industry with potential impact on business. • Government budget delays and related timing issues affecting certain market segments. • Uncertainties with forward-looking statements and associated risks and uncertainties as detailed with the SEC.

Q: Christine Lewag with Morgan Stanley asked about M&A areas and margins with commercial terms and new players.

A: Lynn Bamford mentioned defense electronics as a focus for M&A, Matt Lowrie talked about financial filters for acquisitions, and Lynn discussed margins and working with nontraditional primes.

Q: Greg Dahlberg on for Miles Walton asked about X Energy prototyping and industrial vehicles order book.

A: Lynn mentioned X Energy prototyping is a revenue driver, and Nathan Jones was told industrial vehicles order book is improving with optimism for 2027 growth.

Q: Bradley Oyster for John Godin asked about defense aerospace demand signals and commercial nuclear AP-1000 timeline.

A: Lynn talked about defense aerospace platform demand and John Godin was told AP-1000 revenue timing is uncertain tied to Westinghouse.

Q: Louis de Palma asked about next-gen platforms and naval nuclear strength.

A: Lynn said positioned in next-gen platforms with content secured and pursued, and naval nuclear strength is broad-based across various components.

Q: Jan Engelbrecht asked about commercial nuclear franchise margin and cockpit voice recorders.

A: Lynn discussed SMR margin uplift potential and cockpit voice recorders certification timeline.

Q: Scott Deutschel asked about semiconductor constraints and market share.

A: Lynn said team is managing semiconductor constraints well and focused on taking market share through technology and value delivery.