Curtiss-Wright Raises 2026 Outlook as Q3 Sales Rise 10%

Curtiss-Wright Corp. (NYSE: CW) raised its full-year 2026 guidance after third-quarter adjusted sales increased 10% and adjusted diluted earnings per share rose 16%, supported by defense programs, commercial aerospace production and nuclear-market demand. The company now expects higher sales, operating income, EPS and free cash flow for the year, while its order backlog reached $4.6 billion.

The aerospace and defense manufacturer reported third-quarter adjusted sales of $953 million, up from $869 million a year earlier. Adjusted operating income increased 11% to $189 million, while adjusted operating margin expanded 30 basis points to 19.9%.

Adjusted diluted EPS was $3.94, which the company said was ahead of expectations. Free cash flow totaled $157 million, representing 108% conversion of adjusted net earnings.

New orders rose 15% to $1.1 billion, producing a book-to-bill ratio of 1.1. Backlog increased 12% from the beginning of the year to $4.6 billion, providing support for the company’s updated revenue outlook.

Defense, Aerospace and Nuclear Demand Drive Growth

Aerospace & Industrial segment sales climbed 14% to $282 million. Growth reflected higher sales of actuation equipment in defense markets, continued commercial aerospace OEM demand across narrowbody and widebody platforms, and increased sales of industrial vehicle products. Segment operating income rose 19% to $55 million, while margin increased 80 basis points to 19.4%, helped by higher-volume absorption, product mix and restructuring initiatives. Increased research and development spending partially offset those benefits.

Defense Electronics sales increased 2% to $259 million. Aerospace defense revenue benefited from helicopter and fighter jet programs, while ground defense recorded modest growth from turret drive stabilization systems. Operating income declined 5% to $70 million, and margin contracted 220 basis points to 27.0%, as unfavorable product mix outweighed the benefit of higher defense revenue.

Naval & Power delivered the largest dollar increase, with sales rising 12% to $412 million. Naval defense revenue benefited from the timing of submarine programs and the overhaul of the CVN-75 aircraft carrier. Power and process sales were supported by next-generation advanced reactors, including small modular reactors, and higher government nuclear revenue. Segment operating income increased 25% to $76 million, and margin expanded 200 basis points to 18.6%.

Across end markets, aerospace and defense sales grew 9% to $674 million. Aerospace defense increased 16%, naval defense rose 10% and commercial aerospace advanced 6%, while ground defense declined 1%. Commercial-market sales grew 11% to $279 million, including a 10% increase in Power & Process and 12% growth in General Industrial.

Full-Year Guidance Raised

Curtiss-Wright now expects 2026 adjusted sales of $3.795 billion to $3.840 billion, representing growth of 8% to 10%. Its previous range was $3.768 billion to $3.813 billion.

Adjusted operating income is projected at $731 million to $744 million, up 12% to 14% from 2025. The company expects adjusted operating margin of 19.2% to 19.4%, an expansion of 60 to 80 basis points, with year-over-year profitability improvement anticipated in all three segments.

Adjusted diluted EPS guidance increased to $15.40 to $15.60 from $15.10 to $15.40, implying growth of 16% to 18%. The outlook assumes approximately 36.9 million diluted shares outstanding and a 21.5% tax rate.

Free cash flow is expected to reach $595 million to $615 million, compared with the prior forecast of $585 million to $605 million. Management continues to target conversion of about 105%. Capital expenditures are projected at $105 million to $115 million, including growth investments and an expansion of Naval & Power facilities.

By segment, Aerospace & Industrial sales are forecast at $1.075 billion to $1.088 billion, reflecting stronger defense actuation demand, commercial aerospace growth and a more favorable industrial order book. Naval & Power sales are expected to reach $1.665 billion to $1.678 billion, supported by submarine and aircraft carrier programs, aftermarket activity and nuclear demand. Defense Electronics guidance was unchanged at $1.055 billion to $1.075 billion.

The company also remains on track for nearly $460 million of share repurchases in 2026. Those repurchases are expected to reduce second-half interest income, with full-year other income now projected at $31 million to $32 million.

Leadership Transition and Execution Priorities

Chief Operating Officer Kevin Rayment will become president and chief executive officer on Jan. 1, 2027. Corporate Controller Gary Ogilby has served as interim chief financial officer since Oct. 6, 2026. Curtiss-Wright said its new segment leadership structure is intended to improve operational efficiency while maintaining the company’s strategic direction.

Management continues to prioritize organic growth, operating-margin expansion, research and development investment, working-capital efficiency and disciplined capital allocation. The company expects to exceed the financial targets established at its May 2024 Investor Day and plans to hold its next Investor Day in May 2027.

The outlook remains sensitive to program timing and product mix, particularly in ground defense and Defense Electronics. Higher R&D and development-program spending may also offset some profitability gains. Curtiss-Wright noted that forward-looking expectations are subject to risks including acquisition integration, the company’s ability to sustain operating improvements and broader disruptions that could affect its financial projections.