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CURTISS WRIGHT CORP (CW)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered 9% revenue growth to $0.869B, adjusted operating margin expanded 90 bps to 19.6%, and adjusted EPS rose 14% to $3.40; backlog reached a record ~$3.9B (+14% YTD) and book-to-bill was 1.1x .
  • EPS beat consensus, while revenue was essentially in-line; EBITDA exceeded Street. Management raised full-year 2025 sales, operating income, and EPS guidance, maintaining operating margin and FCF ranges .
  • Segment performance was broad-based: Defense Electronics margins hit 29.2% (adjusted) on favorable absorption/mix; Naval & Power grew double-digit on submarine timing; Aerospace & Industrial saw OEM aerospace strength and restructuring benefits .
  • Catalysts: 25-hour flight data recorder mandate (OEM and retrofit ramp), AP1000 large reactor pipeline (potential 2026 orders), elevated share repurchases (> $450M in 2025), and secular defense demand across NATO/U.S. priorities .

What Went Well and What Went Wrong

What Went Well

  • Broad-based execution with adjusted operating margin 19.6% (+90 bps YoY) and adjusted EPS +14% YoY; CEO: “strong results under our Pivot to Growth strategy… raised full-year guidance” .
  • Defense Electronics margin expansion to 29.2% (adjusted) driven by favorable absorption/mix and operational excellence; CFO flagged timing-driven mix strength and strong backlog .
  • Commercial Nuclear momentum: organic growth >10% in Q3, multiple DOE-funded contracts, and increasing confidence in AP1000 orders in 2026; management highlighted long runway to $1.5B annual nuclear revenue mid-decade .

What Went Wrong

  • Government continuing resolution/shutdown delayed ~$50M of Defense Electronics orders out of Q3; management expects normalization 30–45 days after resolution, creating near-term order timing risk .
  • Naval & Power reported operating margin down 50 bps YoY (reported) given mix and higher R&D; adjusted margin improved only 20 bps to 16.6% (partly offset by R&D on next-gen SMRs) .
  • General Industrial remained flat despite macro challenges in industrial vehicles; management sees pockets of improvement, but continues to expect a tough 2026 before uplift in 2027 .

Financial Results

Consolidated P&L and Margins (GAAP and Adjusted)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$805.645 $876.576 $869.170
Diluted EPS (GAAP, $)$2.68 $3.19 $3.31
Adjusted Diluted EPS ($)$2.82 $3.23 $3.40
Operating Margin (GAAP, %)16.0% 17.8% 19.1%
Operating Margin (Adjusted, %)16.6% 18.3% 19.6%

YoY Snapshot (Q3)

MetricQ3 2024Q3 2025YoY Change
Revenue ($USD Millions)$798.918 $869.170 +9%
Diluted EPS (GAAP, $)$2.89 $3.31 +14%
Adjusted Diluted EPS ($)$2.97 $3.40 +14%
Operating Margin (GAAP, %)18.1% 19.1% +100 bps
Operating Margin (Adjusted, %)18.7% 19.6% +90 bps

Versus Consensus (S&P Global) – Last Three Quarters

MetricQ1 2025Q2 2025Q3 2025
EPS Consensus Mean ($)2.385*3.126*3.290*
EPS Actual ($)2.82 3.23 3.40
Revenue Consensus Mean ($USD Millions)767.747*852.528*869.822*
Revenue Actual ($USD Millions)805.645 876.576 869.170
EBITDA Consensus Mean ($USD Millions)148.117*184.936*194.696*
EBITDA Actual ($USD Millions)161.312 196.825 205.815

Values with asterisks are from S&P Global consensus; Values retrieved from S&P Global.

Segment Performance (Q3 2025 vs Q3 2024)

SegmentSales ($MM) Q3’24Sales ($MM) Q3’25Adj. Op Inc ($MM) Q3’24Adj. Op Inc ($MM) Q3’25Adj. Margin Q3’24Adj. Margin Q3’25
Aerospace & Industrial$229 $248 $39 $46 17.2% 18.6%
Defense Electronics$243 $253 $64 $74 26.5% 29.2%
Naval & Power$327 $368 $54 $61 16.4% 16.6%

KPIs

KPIQ3 2024Q3 2025YoY
New Orders ($MM)—$927 +8%
Book-to-Bill (x)—~1.1x —
Backlog ($B)—~$3.9 +14% YTD
Free Cash Flow ($MM)$163 $176 +8%
FCF Conversion (%)142% 137% —

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Sales ($B)FY 2025 (Adj)$3.390–$3.435 $3.420–$3.455 Raised
Operating Income ($MM, Adj)FY 2025$626–$642 $634–$647 Raised
Operating Margin (Adj, %)FY 202518.5–18.7% 18.5–18.7% Maintained
Diluted EPS (Adj, $)FY 2025$12.70–$13.00 $12.95–$13.20 Raised
Free Cash Flow ($MM)FY 2025$520–$535 $520–$535 Maintained
Other Income ($MM)FY 2025$33–$34 $29–$30 Lowered (share repurchase impact)
Interest Expense ($MM)FY 2025$(42)–$(43) $(42)–$(43) Maintained
Effective Tax Rate (%)FY 202521.8–22.0% 21.8–22.0% Maintained
Diluted Shares (MM)FY 2025~37.9 ~37.6 Lower (repurchases)
A&I Sales ($MM)FY 2025$965–$980 $970–$980 Raised floor
DE Sales ($MM)FY 2025$995–$1,010 $1,000–$1,010 Raised floor
N&P Sales ($MM)FY 2025$1,430–$1,445 $1,450–$1,465 Raised
DE Adj Margin (%)FY 202526.8–27.0% 27.1–27.3% Raised
End Market – Naval Defense (%)FY 2025 vs 2024 Adj7–9% 9–11% Raised
End Market – Ground Defense (%)FY 2025 vs 2024 Adj6–8% 7–9% Raised

Corporate actions: Repurchases targeted >$450M in 2025; Q3 repurchases 581,775 shares for ~$290M; dividend declared $0.24 .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2025)Previous Mentions (Q1 2025)Current Period (Q3 2025)Trend
AI/accelerated computing at tactical edgeRestructuring for throughput, pricing wins; strong DE margins; NVIDIA partnership noted; C5ISR mix benefited —Delivered NVIDIA-based products; unique Blackwell demo; Azure validation on small form factor products to extend cloud apps to tactical edge Expanding capability & ecosystem
Supply chain/CR shutdown impactsCR nuances; DE book-to-bill ~0.9; tactical comms order delays, expect Q4 sales recovery —~$50M of orders pushed; expect normalization 30–45 days post-resolution; short-cycle recovery Near-term timing headwind, limited to Q4/Q1 cadence
Tariffs/macroLesser net tariff impact in A&I guidance; pricing/operational excellence to mitigate Tariff mitigation contemplated in FY guide Tariff mitigation continues; partial exposure in A&I and N&P, offset by pricing/operational excellence Managed headwind
Flight data recorder (25-hour) mandateBoeing OEM ramp; retrofit cadence expected to accelerate; Airbus certification targeted 1H26 —Blend of OEM + staging ahead of retrofits; regional jet >30 seats opportunity; Honeywell partnership Building multi-year ramp
Commercial Nuclear/AP1000Strong Q2 organic growth; SMR development (X-energy, TerraPower) Nuclear uplift; raised FY guide AP1000 content per plant likely rising 2–3x above historical $10–$20M incremental on top of RCPs; first orders expected 2026 (Poland/Bulgaria) Upside optionality into 2026+
NATO/allied demand (dFMS)dFMS growth ~20% expected in 2025; broad program alignment —Continued acceleration in Europe; turret drive stabilization with Rheinmetall; XM-30 U.S. prototype award Sustained multi-year tailwind
R&D executionIncremental ~$20MM R&D in 2025; margin expansion despite investment —Higher R&D in N&P for SMRs; maintaining margin ranges Investing for growth

Management Commentary

  • CEO (press release): “We achieved adjusted operating margin of 19.6%, mid-teens growth in diluted EPS and improved free cash flow generation… we have raised our full-year guidance for sales, operating income and diluted EPS.”
  • CEO (call): “Momentum continues to build… we are positioned for a strong finish in 2025 with expectations to generate record full-year financial results.”
  • CFO (call): “Defense Electronics operating margin of 29.2%, up 270 bps and ahead of expectations, reflecting favorable absorption… and mix of higher margin business.”
  • CEO (call on AP1000): “We historically set content on top of the RCPs as $10–$20 million… the team is doing a really good job of increasing that incremental content, I think, two-three times… pushing content per plant up into the mid-100s for sure.”

Q&A Highlights

  • AP1000 economics and timing: RCPs historically ~$28M each; incremental plant content above RCPs could be 2–3x historical $10–$20M; first plant orders most likely in Poland/Bulgaria in 2026; U.S. timing tied to long-lead funding .
  • Government shutdown impact: ~$50M DE orders pushed; expectation of 30–45 day normalization post-resolution; short-cycle nature supports quick recovery; no change to FY25 outlook .
  • Flight data recorder retrofit: Blend of OEM and staged retrofit demand; regional jet opportunity; Airbus certification targeted 1H26; margin-supportive within Defense Electronics .
  • Industrial vehicles: Stabilization with ~4% YoY order improvement in Q3; strong October; still challenged in 2026, uplift expected in 2027 .
  • M&A pipeline: Priority in Defense Electronics, naval/aircraft safety systems, commercial nuclear; disciplined valuation; expanded buybacks while pipeline continues .

Estimates Context

  • Q3 2025: EPS beat ($3.40 vs $3.290*), revenue essentially in-line/slight miss ($869.170MM vs $869.822MM*), EBITDA beat ($205.815MM vs $194.696MM*). Q2 and Q1 showed EPS and revenue beats across the board .
  • Implications: Street likely raises FY EPS and DE margin expectations; revenue trajectory remains solid with backlog and end-market growth, despite timing in DE orders due to CR/shutdown .

Values with asterisks are from S&P Global consensus; Values retrieved from S&P Global.

Key Takeaways for Investors

  • Q3 quality beat: EPS/EBITDA outperformed on margin expansion in DE; operating momentum supports raised FY EPS to $12.95–$13.20 and margin up 100–120 bps YoY .
  • Near-term timing risk contained: Government order delays in DE are short-cycle and expected to normalize quickly; FY guide intact with strong Q4 setup .
  • Multi-year catalysts: FAA/EASA 25-hour recorder mandate and AP1000 pipeline underpin durable growth in DE and N&P; AP1000 orders in 2026 could unlock step-up revenue/mix benefits .
  • Capital deployment: Record >$450M buybacks in 2025 lower share count; still preserving capacity for M&A—likely in DE and nuclear; supportive for EPS compounding .
  • Watch margins/mix: DE margins raised to 27.1–27.3% for FY25; N&P margin range held given naval mix and R&D; A&I benefits from restructuring and aerospace OEM ramp .
  • Trading setup: Positive estimate revisions likely on EPS/margin; next catalysts include Q4 order normalization, flight recorder retrofit ramp updates, and any AP1000 order visibility; dips on shutdown noise likely buyable given backlog/guide .
  • Medium-term thesis: Secular defense/NATO spend, commercial aerospace production increases, and nuclear renaissance (AP1000 + SMRs) position CW to exceed Investor Day targets and compound EPS mid-teens with robust FCF .