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    Myles Walton • Wolfe Research

    Myles Walton's questions to StandardAero, Inc. (SARO) leadership

    Myles Walton's questions to StandardAero, Inc. (SARO) leadership • Q2 2025

    Question

    Myles Walton followed up on the CFM56 engine exchange program, asking about asset ownership and its impact on cash flow, and requested a detailed walk-through of the strong implied second-half free cash flow.

    Answer

    CFO Dan Satterfield and CEO Russell Ford confirmed the initial exchange engine is an owned asset, but the program is self-funding after a small, one-time investment and not a drag on cash flow. For H2 free cash flow, Satterfield attributed the strength to the unwinding of working capital as a large block of engines ships, combined with lower CapEx and cash taxes in the second half of the year.

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    Myles Walton's questions to StandardAero, Inc. (SARO) leadership • Q3 2024

    Question

    Myles Walton asked about the significant 70% year-over-year growth in intersegment sales from Component Repair Services (CRS) and how much this in-sourcing initiative contributed to the 83 basis points of margin expansion in the Engine Services segment. He also asked for a forward look on this trend.

    Answer

    CFO Dan Satterfield confirmed this growth is a result of a key in-sourcing initiative. He explained it benefits the enterprise by growing the higher-margin CRS segment while also increasing Engine Services' margins by providing repairs at internal cost. He stated the company is highly focused on this and expects the impact to grow further.

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    Myles Walton's questions to Curtiss-Wright Corp (CW) leadership

    Myles Walton's questions to Curtiss-Wright Corp (CW) leadership • Q2 2025

    Question

    Myles Walton of Wolfe Research inquired about the M&A pipeline and capital deployment strategy, and asked for details on the forecasted Q3 decline and Q4 reacceleration in the Defense Electronics segment, including the Q2 book-to-bill.

    Answer

    President, CEO & Chair Lynn Bamford stated that potential M&A deals from Q1 did not proceed, but the pipeline remains active. VP & CFO K. Christopher Farkas confirmed share buybacks are a priority and explained the Defense Electronics timing is due to government order delays under the CR, with a 0.9 book-to-bill in Q2 and an expected surge in orders and revenue in Q4.

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    Myles Walton's questions to Curtiss-Wright Corp (CW) leadership • Q1 2025

    Question

    Myles Walton questioned the Defense Electronics segment's margin outlook, noting that the implied performance for the rest of the year seems conservative compared to the strong Q1 run rate. He also requested a breakdown of the book-to-bill ratio by segment.

    Answer

    CEO Lynn Bamford confirmed that conservatism remains in the guidance. CFO K. Farkas specified that Q1 Defense Electronics margins benefited from favorable FX that is expected to fade, while R&D spending will ramp up. He also noted a deliberate effort to smooth the segment's historical fourth-quarter spike. For book-to-bill, Farkas provided the following breakdown: Aerospace & Industrial at 1.1x, Defense Electronics at 1.0x, and Naval & Power at a strong 1.6x.

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    Myles Walton's questions to Curtiss-Wright Corp (CW) leadership • Q4 2024

    Question

    Myles Walton asked about the driver behind the large increase in deferred revenue on the cash flow statement and the reasons for the Naval Defense business significantly outperforming its initial 2024 growth guidance. He also requested the 2024 book-to-bill by segment and the outlook for the subsea pump business.

    Answer

    CFO Chris Farkas attributed the record deferred revenue increase of $140 million to a high volume of naval orders and strong advance billings. He explained that Naval Defense's 2024 outperformance was due to better-than-expected material receipts and accelerated staffing. He provided 2024 book-to-bills of 1.05x for A&I, 1.16x for Defense Electronics, and 1.3x for Naval & Power. CEO Lynn Bamford added that while pro-fossil fuel policies are a tailwind for subsea pumps, the long-term potential remains at $250 million by the end of the decade.

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    Myles Walton's questions to Curtiss-Wright Corp (CW) leadership • Q3 2024

    Question

    Myles Walton asked about the significant implied Q4 margin uplift in the Aerospace & Industrial segment and its sustainability. He also questioned the unusual forecast for a sequential Q4 decline in revenue and margins for the historically strong Defense Electronics segment.

    Answer

    CFO Chris Farkas attributed the A&I margin expansion primarily to restructuring savings and volume absorption, with a notable impact expected in Q4. He confirmed the Q4 sequential decline in Defense Electronics is due to pulling revenues forward into Q3 to facilitate footprint restructuring for future growth, which temporarily affects the mix of higher-margin products.

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    Myles Walton's questions to TransDigm Group Inc (TDG) leadership

    Myles Walton's questions to TransDigm Group Inc (TDG) leadership • Q3 2025

    Question

    Myles Walton from Wolfe Research LLC asked about a potential sequential decline in aftermarket revenue, which would be unusual for Q3, and inquired about distributor point-of-sale (POS) trends. He also asked if the company's long-term aftermarket analysis adjusted for aircraft age.

    Answer

    Co-COO Mike Lisman reported that distributor POS grew in the double digits, outpacing the overall commercial aftermarket. He clarified that aftermarket revenue was about flat sequentially from Q2 to Q3. Lisman also stated that the four-year historical analysis was based on volume and did not adjust for the increased age of the aircraft fleet.

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    Myles Walton's questions to TransDigm Group Inc (TDG) leadership • Q2 2025

    Question

    Myles Walton asked for the reason behind the downward revision of the commercial OEM growth rate guidance and questioned why overall company guidance has been reiterated for two consecutive quarters without a raise, a departure from past trends.

    Answer

    Co-COO Mike Lisman explained the commercial OEM guidance was nudged down due to weakness in the business jet and helicopter submarkets, not commercial transport. Regarding the steady guidance, Lisman stated the company's process for setting guidance with a degree of conservatism hasn't changed and that tweaks to submarket forecasts this quarter netted out to a push.

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    Myles Walton's questions to TransDigm Group Inc (TDG) leadership • Q1 2025

    Question

    Myles Walton asked about the unexpected sequential increase in Q1 margins, the cause of high contract loss amortization, and the details of the asset sold that resulted in a gain.

    Answer

    CFO Sarah Wynne attributed the strong Q1 margin to a significant mix shift from commercial OEM to commercial aftermarket, along with productivity projects. She explained that the contract loss amortization relates to lumpy contracts from the Esterline acquisition. Wynne and CEO Kevin Stein clarified that the gain on sale was from divesting a small business named Matt Systems, which was acquired with Cobham.

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    Myles Walton's questions to TransDigm Group Inc (TDG) leadership • Q4 2024

    Question

    Myles Walton questioned the significant divergence between distribution and non-distribution aftermarket growth in Q4. He also asked if the OEM guidance assumes flat Boeing output year-over-year, given commentary on strike recovery times.

    Answer

    Co-COO Mike Lisman described the distribution channel data as a 'bit of a leading indicator' but noted it can be noisy quarter-to-quarter. Regarding OEM guidance, he reiterated their conservative, bottoms-up approach and acknowledged they are likely 'more conservative here than others' due to supply chain fragility, without confirming specific build rate assumptions.

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    Myles Walton's questions to Embraer SA (ERJ) leadership

    Myles Walton's questions to Embraer SA (ERJ) leadership • Q2 2025

    Question

    Myles Walton of Wolfe Research, LLC asked for clarification on the strong performance in the Defense segment, questioning why the high margin wouldn't continue if driven by POC completion. He also asked for the reason behind aircraft deliveries moving into the next quarter.

    Answer

    Antonio Garcia, EVP - Financial & IR, clarified that the Defense segment is on a clear path toward higher single-digit margins as the contract mix shifts to more profitable export contracts, but this is a gradual progression. Regarding deliveries, he explained the shift was due to commercial paperwork and customer readiness issues, not production problems or tariff-related delays.

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    Myles Walton's questions to Embraer SA (ERJ) leadership • Q1 2025

    Question

    Myles Walton from Wolfe Research inquired about the impact of U.S. tariffs, asking if they are causing hesitation among U.S. airlines in accepting E175s.

    Answer

    CFO Antonio Carlos Garcia stated the estimated 90 basis point EBIT margin impact from tariffs is concentrated in Executive Aviation and Services. He noted that currently, U.S. customers are bearing the cost and there has been no commercial setback, but it is still early to be certain.

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    Myles Walton's questions to Embraer SA (ERJ) leadership • Q4 2024

    Question

    Myles Walton of Wolfe Research inquired about ongoing supply chain constraints that are limiting growth and asked about any specific exposure to the Precision Castparts fire.

    Answer

    CEO Francisco Neto acknowledged that supply chain issues persist and that bottlenecks move between suppliers, but stated the 2025 production plan is realistic and accounts for these limitations. He mentioned they are using digital tools to manage risks and that while the year will be challenging, they are prepared. He confirmed they are managing risks like the one mentioned.

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    Myles Walton's questions to Howmet Aerospace Inc (HWM) leadership

    Myles Walton's questions to Howmet Aerospace Inc (HWM) leadership • Q2 2025

    Question

    Myles Walton of Wolfe Research LLC inquired about the significance of product rationalization within the Engineered Structures segment, asking about its impact on future margins and potential revenue headwinds.

    Answer

    Executive Chairman and CEO John Plant explained that the majority of the rationalization has already occurred, driven by a business sale and a plant closure. He stated that these actions have solidified margins, and he expects the segment to maintain its current strong margin performance (above 20%) through the second half of the year. Plant noted that while commercial aerospace revenue in the segment was soft due to destocking, the overall strategy is to pursue both revenue growth and margin enhancement.

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    Myles Walton's questions to Howmet Aerospace Inc (HWM) leadership • Q1 2025

    Question

    Myles Walton of Wolfe Research asked about the Fastening Systems segment, specifically if it benefited from a competitor's fire and whether Howmet has secured new long-term agreements or market share gains.

    Answer

    Executive Chairman and CEO John Plant clarified that there was no meaningful revenue impact in Q1 from the competitor issue. However, he noted Howmet has booked $20-$30 million in related orders and is still quoting hundreds of parts, though he estimated the total opportunity would be well short of $100 million.

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    Myles Walton's questions to Howmet Aerospace Inc (HWM) leadership • Q4 2024

    Question

    Myles Walton questioned the rationale behind the implied guidance for the remainder of the year, which suggests a step-down in margins and lower incrementals after Q1, asking if this reflects conservatism or specific headwinds.

    Answer

    Executive Chairman and CEO John Plant attributed the outlook to conservatism, stating that while they could have been more optimistic, significant uncertainties remain, particularly regarding Boeing's narrow-body production rates. He emphasized a cautious approach to avoid getting ahead of themselves given the lack of visibility and the back-end loaded nature of the year. Plant also noted they are planning for approximately 1,000 net new hires in 2025.

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    Myles Walton's questions to Howmet Aerospace Inc (HWM) leadership • Q3 2024

    Question

    Myles Walton questioned the conservative mid-single-digit growth forecast for defense in 2025 and requested a breakdown of the $1.25 billion spares revenue.

    Answer

    CEO John Plant defended the forecast by noting that F-35 production rate increases are modest, though he is optimistic about spares demand for the growing fleet. CFO Ken Giacobbe clarified the spares revenue split for 2024, estimating approximately $550 million from commercial aero and $700 million from defense and IGT, with commercial aero growing at a faster rate.

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    Myles Walton's questions to Huntington Ingalls Industries Inc (HII) leadership

    Myles Walton's questions to Huntington Ingalls Industries Inc (HII) leadership • Q2 2025

    Question

    Myles Walton of Wolfe Research asked for an update on the AUKUS security pact's trajectory and the role of international shipbuilding partnerships. He also inquired about the number of employees hired during the quarter.

    Answer

    President and CEO Christopher Kastner expressed a 'very bullish' view on AUKUS, noting its broad support and HII's partnership with Babcock in Australia. He also highlighted a strategic relationship with HHI of Korea to boost industrial base capacity. He stated HII hired about 2,400 experienced employees in the quarter and has seen positive month-over-month retention improvements.

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    Myles Walton's questions to Huntington Ingalls Industries Inc (HII) leadership • Q1 2025

    Question

    Myles Walton asked about Q1 workforce trends, including hiring and attrition, the progress of increased outsourcing, and whether the Submarine Industrial Base (SAS) program benefits aircraft carriers.

    Answer

    President and CEO Christopher Kastner reported hiring 1,000 experienced craftspeople and noted that attrition is trending down but is not yet at pre-COVID levels. He described the outsourcing program as on-schedule and high-quality. He also confirmed that SAS supports the entire nuclear industrial base, which includes aircraft carriers.

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    Myles Walton's questions to Huntington Ingalls Industries Inc (HII) leadership • Q4 2024

    Question

    Myles Walton questioned the 2025 shipbuilding margin guidance, noting the Q1 forecast is at the low end before major initiatives take effect. He also asked about the risk-reward balance of the plan to significantly increase outsourcing, particularly concerning quality control.

    Answer

    President and CEO Christopher Kastner described the full-year guidance as inclusive of all initiatives and also 'a bit conservative' given recent performance. CFO Thomas Stiehle noted the Q1 guide reflects the immediate outlook, with potential for improvement as the year progresses. On outsourcing, Kastner acknowledged the risks but stated they are mitigated by working with existing, proven partners and using pilot projects. Stiehle added that the W International acquisition is a smart way to 'in-source' a proven workforce to help achieve throughput goals.

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    Myles Walton's questions to Huntington Ingalls Industries Inc (HII) leadership • Q3 2024

    Question

    Myles Walton requested a breakdown of the $800 million operating cash flow guidance reduction, seeking to understand how much was tied to contract delays versus operational performance, and asked for a framework for future cash generation.

    Answer

    CEO Christopher Kastner and CFO Thomas Stiehle stated the reduction was a combination of both factors but declined to provide a specific split due to ongoing contract negotiations. For future cash flow, Mr. Kastner projected it would be 'choppy for a couple of years,' with recovery dependent on execution, the final structure of new contracts, and the transition away from pre-COVID agreements.

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    Myles Walton's questions to ATI Inc (ATI) leadership

    Myles Walton's questions to ATI Inc (ATI) leadership • Q2 2025

    Question

    Myles Walton asked about the progress of share gains in the isothermal forging business for the GTF engine and inquired about the full-year revenue expectation for the titanium business.

    Answer

    President & CEO Kimberly Fields described the forging business as a 'real bright spot,' stating that H1 shipments to Pratt & Whitney nearly equaled all of 2024, with another 50% growth expected over the next two years. On the second point, EVP & CFO Don Newman stated that full-year titanium revenue is expected to be flattish compared to the prior year, as growth is constrained by ongoing airframe inventory destocking.

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    Myles Walton's questions to FTAI Aviation Ltd (FTAI) leadership

    Myles Walton's questions to FTAI Aviation Ltd (FTAI) leadership • Q2 2025

    Question

    Myles Walton of Wolfe Research asked about FTAI's capital return plans, specifically regarding share repurchases, leverage comfort levels, and the rationale for its target portfolio size of 350-400 CFM56 engines in an asset-light model.

    Answer

    Joseph Adams, Chairman, CEO & Director, confirmed the goal of achieving a strong BB rating this year and being comfortable with leverage below 3x EBITDA. He stated that after prioritizing growth investments, share buybacks would be the top use for surplus capital. He explained the engine portfolio target is sustainable because engines within the SCI vehicle are effectively under FTAI's management, providing access to a larger inventory without direct ownership, thus supporting the asset-light strategy.

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    Myles Walton's questions to FTAI Aviation Ltd (FTAI) leadership • Q1 2025

    Question

    Myles Walton asked about the engine mix of assets in the SCI program, the sourcing channels for these assets, and sought clarification on an accounting elimination and a free cash flow calculation.

    Answer

    CEO Joseph Adams and COO David Moreno confirmed that the vast majority (~90%) of SCI assets are CFM-powered. Adams detailed sourcing from both large lessors and directly from airlines via sale-leasebacks. CFO Eun Nam clarified a $7 million profit elimination was for intra-entity sales to SCI. Adams also confirmed the H1 free cash flow forecast is comparable to the 'Adjusted Free Cash Flow' line item in the presentation.

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    Myles Walton's questions to FTAI Aviation Ltd (FTAI) leadership • Q4 2024

    Question

    Myles Walton sought clarification on the SCI partnership, the size of the investment pipeline, and the nature of the $310 million replacement CapEx in the 2025 cash flow forecast. Specifically, he asked if the $1 billion pipeline was incremental to the seed portfolio and if the CapEx was a recurring figure.

    Answer

    CEO Joe Adams clarified that the first SCI closing was with a group of partners whose collective stake is larger than FTAI's, with a second closing expected soon. He confirmed the $1 billion investment pipeline includes the initial $550 million seed portfolio, it is not incremental. Adams also explained that the $310 million in replacement CapEx is not a recurring annual figure; it is specifically for replacing assets sold from FTAI's balance sheet to maintain the existing business, separate from SCI's capital needs.

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    Myles Walton's questions to Boeing Co (BA) leadership

    Myles Walton's questions to Boeing Co (BA) leadership • Q2 2025

    Question

    Myles Walton of Wolfe Research asked for clarification on the Q2 free cash flow outperformance and its impact on the full-year guidance, suggesting a revised target of approximately $3 billion in cash usage.

    Answer

    EVP & CFO Brian West confirmed that a full-year free cash flow usage of around $3 billion is a 'pretty good assumption.' He attributed the Q2 beat to higher commercial delivery volume, particularly on the 777 program, and favorable timing. West guided for Q3 cash flow to be similar to Q2's usage, before a potential one-time DOJ payment, setting up for a positive free cash flow in Q4.

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    Myles Walton's questions to Boeing Co (BA) leadership • Q1 2025

    Question

    Myles Walton asked for confirmation on full-year delivery guidance, specifically whether the framework of low 400s for the 737 and around 80 for the 787 still holds, given the potential disruption of 50 aircraft deliveries to China.

    Answer

    EVP and CFO Brian West confirmed that the delivery guidance remains in the right ballpark. He explained that a strong operational start to the year provides a buffer to offset potential pressure from the China situation. West also provided Q2 delivery expectations and affirmed that production rate increases for both programs will proceed as planned.

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    Myles Walton's questions to Boeing Co (BA) leadership • Q4 2024

    Question

    Myles Walton asked about the importance of the Spirit AeroSystems integration for achieving production rates, ongoing 787 supply chain constraints like interiors and heat exchangers, and the potential 787 delivery total for 2025.

    Answer

    CEO Kelly Ortberg asserted that Spirit fuselages are not a constraint for the 38/month rate and that seat monuments and their certification remain the key challenge for the 787 program. CFO Brian West added that a 787 delivery number of 75-80 for the year is 'doable, maybe a little bit better,' based on production rate increases and liquidating inventory.

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    Myles Walton's questions to Boeing Co (BA) leadership • Q3 2024

    Question

    Myles Walton of Wolfe Research asked for clarification on what CEO Kelly Ortberg considers core versus non-core businesses and how significant portfolio shaping will be in the company's turnaround plan.

    Answer

    President and CEO Kelly Ortberg stated that Boeing's core businesses are commercial airplanes and defense systems, which will remain with the company. He confirmed an ongoing evaluation of the broader portfolio to identify non-essential or distracting fringe businesses that could be divested, emphasizing a strategy of doing less but doing it better. However, he noted that no specific list of assets for divestiture has been created yet.

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    Myles Walton's questions to Hexcel Corp (HXL) leadership

    Myles Walton's questions to Hexcel Corp (HXL) leadership • Q2 2025

    Question

    Myles Walton from Wolfe Research LLC asked how Hexcel leverages its 'best supplier' award from Airbus, whether there is internal risk to the planned A350 production ramp in H2, and about the cash impact of the recent restructuring charge.

    Answer

    CEO Tom Gentile stated the award reinforces Hexcel's role in supporting rate increases and facilitates joint productivity initiatives. He confirmed no internal risk to meeting the H2 demand, as the company is staffed for it. CFO Patrick Winterlich specified that 85-90% of the $24 million restructuring charge will be cash outflows, primarily in Q3.

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    Myles Walton's questions to Hexcel Corp (HXL) leadership • Q3 2024

    Question

    Myles Walton of Wolfe Research, LLC inquired about the updated end-market growth assumptions for 2024, particularly for defense and industrial, and the expected revenue headwind from the planned divestiture of the Austrian industrial plant in 2025.

    Answer

    CEO Tom Gentile detailed Q3 pull rates for key programs (A350, 787, A320) and noted a conservative Q4 forecast for the MAX program. He stated the Austrian plant divestiture could be a $30-$40 million headwind in 2025. Executive Patrick Winterlich added that commercial aerospace growth should be near mid-teens, while industrial will be down strong double digits for 2024.

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    Myles Walton's questions to Textron Inc (TXT) leadership

    Myles Walton's questions to Textron Inc (TXT) leadership • Q2 2025

    Question

    Myles Walton from Wolfe Research inquired about Textron's interest in investing in the smaller drone market, given its experience in Group 3 UAS, and asked for an update on the Bell 525 helicopter certification process.

    Answer

    Scott C. Donnelly, Chairman, CEO & President, acknowledged Textron's strength in Group 3 UAS and ongoing R&D in other classes but did not comment on specific new investment plans. Regarding the Bell 525, he described the certification as being in its last stages and heavily dependent on the FAA's process, involving extensive documentation and final test criteria.

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    Myles Walton's questions to Textron Inc (TXT) leadership • Q1 2025

    Question

    Myles Walton questioned the sequential decline in the Textron Systems backlog and asked for color on the larger use of cash in operating activities during the quarter.

    Answer

    Chairman and CEO Scott Donnelly explained that the Systems backlog is inherently 'lumpy' due to the timing of large contract awards and that the decline should not be over-interpreted. On cash flow, Donnelly attributed the use of cash to an additional inventory build at Aviation, which will normalize, and payment timing on government programs at Bell, with receipts expected in Q2.

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    Myles Walton's questions to Textron Inc (TXT) leadership • Q4 2024

    Question

    Myles Walton asked about the reason for the R&D spending underrun in 2024 and the outlook for 2025. He also questioned how sensitive the Systems segment's 2025 outlook is to the outcomes of the FTUAS and RCV program decisions.

    Answer

    Scott Donnelly, Chairman and CEO, attributed the 2024 R&D underrun primarily to the conclusion of the FARA program at Bell, which reduced the required investment. He described the 2025 forecast of $500 million as a normalized level. For the Systems segment, Donnelly stated that the 2025 outlook has low sensitivity to the FTUAS and RCV decisions, as any awards would occur late in the year and ramp slowly, making them more impactful for 2026 and beyond.

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    Myles Walton's questions to Textron Inc (TXT) leadership • Q3 2024

    Question

    Myles Walton asked about the significance of the FTUAS and Robotic Combat Vehicle programs for Textron Systems' growth and the certification timeline for the Bell 525 helicopter.

    Answer

    CEO Scott Donnelly identified the FTUAS and RCV programs as critical future growth drivers for the Systems segment. Regarding the Bell 525, he indicated that while the flight test program is progressing well, certification would likely slip into 2025 due to the extensive FAA documentation and approval process.

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    Myles Walton's questions to Lockheed Martin Corp (LMT) leadership

    Myles Walton's questions to Lockheed Martin Corp (LMT) leadership • Q2 2025

    Question

    Myles Walton of Wolfe Research asked why investors should feel confident that problem programs, particularly the classified Aeronautics program, have been de-risked, noting that the described process changes sound similar to those mentioned in Q4 2024.

    Answer

    Chairman, President & CEO James Taiclet explained that a reconstituted program review team with wider expertise, led by new CFO Evan Scott, conducted a more detailed reassessment that re-baselined longstanding assumptions, leading to the new charge. Taiclet also stated he would engage customers to restructure contracts. CFO Evan Scott added that the new controls provided better insight into emerging challenges, allowing for earlier signaling of cost issues.

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    Myles Walton's questions to Lockheed Martin Corp (LMT) leadership • Q4 2024

    Question

    Myles Walton of Wolfe Research inquired about the cash flow impact of the unplanned Q4 charges, particularly on the Aeronautics side, and asked if the significant pension funding requirement is expected to return in 2026.

    Answer

    CFO Jesus Malave confirmed the Aeronautics classified program charge will create a cash drag over the next 2-3 years. Regarding 2026 pension requirements, he stated the company will use a similar formula as before: driving working capital improvements to offset the headwind and leveraging its strong balance sheet for flexibility.

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    Myles Walton's questions to Lockheed Martin Corp (LMT) leadership • Q3 2024

    Question

    Myles Walton asked for a follow-up on the CCA program, specifically if Lockheed is competing on the autonomy portion of Increment 1, and requested an update on a classified Aeronautics contract, including any line of sight to improved performance.

    Answer

    CEO James Taiclet could not comment on Increment 1 specifics due to classification but highlighted heavy investment in autonomy, citing public demonstrations of an autonomous Black Hawk and F-16. CFO Jesus Malave addressed the Aeronautics classified program, acknowledging an $80 million charge in the quarter due to higher costs from an aggressively priced bid. He stated the team is focused on changing the program's trajectory while meeting commitments.

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    Myles Walton's questions to Northrop Grumman Corp (NOC) leadership

    Myles Walton's questions to Northrop Grumman Corp (NOC) leadership • Q2 2025

    Question

    Myles Walton of Wolfe Research sought clarification on the cash benefit from the R&D capitalization reversal and asked for more detail on the space-based interceptors the company is testing, including whether they are on-orbit and their technical approach.

    Answer

    CFO Kenneth Crews clarified that the tax reform provides an additional cash benefit of $200 million on top of the existing baseline plan. Chair, CEO & President Kathy Warden stated that the space-based interceptor tests are currently ground-based. Citing competitive sensitivities, she declined to provide further detail on the technical approach but noted the capability could be accelerated to meet the administration's desired timeframe.

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    Myles Walton's questions to Northrop Grumman Corp (NOC) leadership • Q1 2025

    Question

    Myles Walton questioned the company's confidence in its significant second-half sales ramp, given that Q1 sales came in below expectations and the delayed bookings are not yet secured. He also asked for clarification on whether any programs experienced stop-work orders.

    Answer

    CFO Ken Crews explained that confidence in the H2 ramp is based on large awards from late 2024 already in backlog, planned ramps on existing programs like Sentinel, and expected new competitive awards in space. He confirmed the issue was timing of new contracts, not stop-work orders.

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    Myles Walton's questions to Northrop Grumman Corp (NOC) leadership • Q4 2024

    Question

    Myles Walton from Wolfe Research asked about Northrop's potential participation and timing for the F/A-XX program and sought confirmation on the company's long-term free cash flow target for 2028.

    Answer

    CEO Kathy Warden confirmed that Northrop Grumman is one of the companies in the Navy's source selection for its next-generation fighter but could not provide more detail due to the restricted nature of the procurement. CFO Ken Crews reaffirmed that the company remains on track to achieve its previously stated target of $4 billion in free cash flow in 2028.

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    Myles Walton's questions to Northrop Grumman Corp (NOC) leadership • Q3 2024

    Question

    Myles Walton of Wolfe Research asked for confirmation that 2024 free cash flow would reach the high end of its range and questioned the drivers for the 2025 increase, noting that it seemed fully accounted for by non-operational items and asking if working capital was an offset.

    Answer

    Outgoing CFO David Keffer clarified he was not guiding to a specific end of the 2024 free cash flow range, only noting that Q4 would be strong. New CFO Ken Cruse added that for 2025, working capital is expected to be relatively flat, and the primary drivers of cash flow expansion will be improved operating performance and lower capital investments, not just tax and pension benefits.

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    Myles Walton's questions to RTX Corp (RTX) leadership

    Myles Walton's questions to RTX Corp (RTX) leadership • Q2 2025

    Question

    Myles Walton of Wolfe Research sought clarification on tariff assumptions for the remainder of the year and asked about the specific cash flow benefit from the legislative reversal of R&D expense capitalization.

    Answer

    Neil Mitchill, CFO, clarified that the current $500 million tariff forecast assumes current rates hold, but the company's EPS and cash flow guidance ranges could absorb potential increases. Regarding the tax legislation, he explained that the permanent restoration of R&D expensing provides a moderate cash benefit this year, offsetting about 25-30% of the tariff headwind, with further benefits expected in 2026 and beyond.

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    Myles Walton's questions to RTX Corp (RTX) leadership • Q1 2025

    Question

    Myles Walton inquired about potential secondary impacts from tariffs not included in the outlook, such as changes in customer buying behavior in China and the risk of supply chain disruptions.

    Answer

    Executive Chairman and CEO Christopher Calio noted that RTX is working closely with its supply base to manage tariff impacts and avoid disruptions, highlighting recent supply chain improvements. Regarding China, he acknowledged its importance as a market but emphasized that RTX has been actively diversifying its global supply chain for some time, an effort accelerated by COVID-19.

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    Myles Walton's questions to RTX Corp (RTX) leadership • Q4 2024

    Question

    Myles Walton of Wolfe Research inquired about the GTF powder metal issue, seeking confirmation on the 2025 cash spending outlook and the previously discussed step-down in costs for 2026.

    Answer

    Executive Christopher Calio confirmed that the outlook for the GTF fleet management plan remains consistent, with a focus on increasing MRO output, which grew 30% last year. CFO Neil Mitchill added that the 2025 cash impact is projected to be $1.1 billion to $1.3 billion, with the residual amount currently planned for 2026, though the timing could shift.

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    Myles Walton's questions to RTX Corp (RTX) leadership • Q3 2024

    Question

    Myles Walton of Wolfe Research asked about the expected acceleration of organic growth at the Raytheon segment into 2025 and beyond, and how quickly the higher international mix in the backlog will translate into sales.

    Answer

    Executive Christopher Calio highlighted Raytheon's record $16.6 billion in quarterly bookings and a $60 billion backlog, which is now 44% international. He cautioned that converting this backlog will take time and a significant impact won't be seen in 2025. Executive Neil Mitchill added that the mix benefit is already positively impacting margins by over 100 basis points and that productivity is improving year-over-year as supply chain challenges ease.

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    Myles Walton's questions to Spirit AeroSystems Holdings Inc (SPR) leadership

    Myles Walton's questions to Spirit AeroSystems Holdings Inc (SPR) leadership • Q1 2024

    Question

    Myles Walton of Wolfe Research asked about Pat Shanahan's interest in the Boeing CEO role and requested quantification on how many of the FAA's audit findings have been addressed.

    Answer

    CEO Pat Shanahan responded that his focus remains entirely on Spirit. Regarding the audit, he recalled 28 findings and expressed confidence that all have been addressed with mitigating actions, emphasizing that their internal quality plan is even more comprehensive and has already driven a 15% quality improvement.

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