Curtiss-Wright (CW) Q3 2026 earnings review
Curtiss-Wright raises its full-year outlook, but defense electronics barely grew
Curtiss-Wright, a maker of parts for submarines, fighter jets and nuclear plants, grew almost everywhere except defense electronics. Sales climbed 10%, to $953 million. Profit per share, excluding one-offs, reached $3.94. Chief executive Lynn Bamford lifted the full-year outlook for every main measure, and customers again ordered more work than the company delivered, which took the order book to a record.
| Sales | $953 million +10% from a year ago |
|---|---|
| Profit per share, excluding one-offs | $3.94 +16% from a year ago |
| New orders | $1.1 billion +15%; order book at a record $4.6 billion |
| Full-year sales outlook | Raised $27M middle of the range: 9% growth |
⚖️ Verdict: 🟢 Bullish
The standing case got better, because the raise rests on the order book rather than on one good quarter. Orders rose 15% and the backlog reached a record, so next year's sales have more cover than they did in June. One caution: the electronics unit added 2% only by pulling revenue forward from the fourth quarter, and its full-year range stayed where it was, so the year still turns on a very large December.
The question now is whether the long-promised order for reactor coolant pumps lands before the year ends. One view holds that the federal loan and the daily work with Westinghouse make it a matter of weeks; the other notes that the date has slipped before and that no target has ever relied on it. February's results will show which reading was right.
🐂 Bull Case
Orders Outrun Sales for a Record Backlog
Curtiss-Wright books most of its work years before it ships anything, so the order book says more about 2027 than this quarter's sales do. Customers placed about $1.1 billion of new orders in the three months, 15% more than a year earlier. The unfilled order book finished September at a record $4.6 billion.
Chief executive Lynn Bamford credited "continued strong demand in defense electronics and growth across all of our A&D markets", her shorthand for aerospace and defense. Orders at that electronics unit rose 27%, following a record quarter in June, and chief operating officer Kevin Rayment said bookings stayed strong into October.
- New orders: about $1.1 billion, 15% above a year ago
- Orders against sales: 1.11 times, so more work came in than went out
- Backlog: $4.6 billion, 12% above the level at the end of December
- Defense electronics orders: 27% above a year ago
What to watch: the backlog figure in February. The pile has built by roughly $100 million a quarter all year, while a year ago it stood still between June and September. Orders slipping below sales would end that build and take away the main support for next year's targets.
Nuclear Work Turns Into Sales and Contracts
Curtiss-Wright sells pumps, valves and instruments to nuclear power stations, both the operating fleet and the small reactors now being designed. Sales in its power and process market, which covers that nuclear work alongside industrial valves, rose 10% to $165 million as several reactor projects moved from design into first prototypes.
Bamford announced a contract and a framework agreement with Rolls-Royce to "design, qualify, and manufacture the specialized nuclear valve package" for its reactors, lifting Curtiss-Wright's content on that design to "in excess of $100 million of revenue". She also disclosed "a $30 million expansion of our Round Rock Texas facility", which builds nuclear sensors.
What to watch: the power and process figure in February. The company held its full-year range at 13% to 15% growth. By our math that needs roughly 22% in the final quarter, well above the 11% the first nine months produced.
Cheaper Production and Fewer Shares Lift Profit
Making the products cost Curtiss-Wright less for every dollar of sales. Production costs took 61.0% of revenue, against 62.3% a year earlier. Selling and administrative costs moved the other way, taking 0.8 points more of each sale. The adjusted operating margin still finished 0.3 points higher, at 19.9%.
Buybacks did the rest. The group spent $352 million on its own shares in the quarter, after planning a minimum of $60 million for the whole year, and in September its board added $510 million to what it may still buy. Adjusted operating income climbed 11%; profit per share, excluding one-offs, advanced 16%.
What to watch: the selling and administrative line in February. It has taken a larger slice of each sale for two quarters now, so if factory savings stop covering it, this year's margin target of 19.2% to 19.4% becomes a ceiling.
🐻 Bear Case
Defense Electronics Pulled Sales Into This Quarter
Defense Electronics builds the computers, radios and flight recorders that sit inside aircraft and armoured vehicles, and it earns the fattest margin of the three divisions. Its sales grew 2%, to $259 million, a third straight quarter with almost none. The margin on those sales fell 2.2 points, to 27.0%.
Finance chief Gary Ogilby said the result beat his own expectation because of "the timing of tactical communications equipment revenues within ground defense, as some revenues accelerated into the third quarter". Bamford said the same thing more directly: "we did pull some revenues out of Q4 into Q3". Neither executive sized the shift.
That matters because the full-year range for the unit did not move, at 4% to 6% growth. By our math the fourth quarter therefore has to reach about $304 million. That sits 17% above the quarter just reported, and the year-ago base it must clear was itself a jump of the same size.
What to watch: fourth-quarter sales for this unit in February. Falling short of roughly $304 million would show that the orders booked this year have not turned into shipments, and that the full-year target leaned on a quarter which never arrived.
The Reactor Pump Order Has Not Arrived
Westinghouse's AP1000 is the large reactor design most likely to be built next in the United States, and Curtiss-Wright makes the pumps that drive water through its core. Bamford values that content at more than $110 million for each plant, with another $50 million to $70 million of related equipment on top.
Asked in early November how close the first order is, she answered: "we do still expect an order in 2026 and we surely realize where we are in November and that runway is getting shorter". Poland now looks the likeliest first buyer, and the US Department of Energy keeps making progress, Bamford added.
An empty order book here costs this year nothing, because management left the award out of every 2026 target. But the nuclear case rests on new construction rather than on servicing today's reactors, and Ogilby said revenue arrives over a bell curve, so each month of delay pushes the money further out.
What to watch: the fourth-quarter release in February, or an announcement before it. A year closing without the award would break a date management has repeated all year and would leave 2027 revenue from new reactors resting on the smaller prototype contracts.
Cash Fell While Inventories Climbed
Profit rose, and cash did not. Free cash flow, the money left after paying for buildings and machines, came to $157 million, down $19 million from a year ago. Curtiss-Wright said "higher capital investments and higher tax payments more than offset higher cash earnings"; gross spending on plant more than doubled.
Working capital moved against the top line too. Stock on hand has swelled 16% since December and money owed by customers 13%, while sales across the nine months advanced 9%. Cash collected before delivery grew 15%, so customers are financing part of that build.
What to watch: cash in the final quarter. The raised plan points to about $305 million, under last year's $315 million, which means the full-year record now depends on collecting what the balance sheet has absorbed.
Risks this quarter didn't answer
Four standing worries went without fresh numbers this quarter. Management talked around each of them on the call, and in every case the reading that would settle the argument sits in a disclosure the group has not yet made.
- Commercial nuclear revenue: not broken out again, so progress can only be read through the wider power and process market
- Memory chips: Rayment said "the memory prices have been going up" and that parts for 2026 are secured; the cost of 2027 supply is not quantified
- Acquisitions: Rayment calls deals the first use of spare cash, yet the last one closed in 2024
- Ground defense: sales slipped 1%, and the full-year plan still has that market shrinking 2% to 4%
What to watch: the February call, where Rayment sets out his own targets for the first time. Naming a number for commercial nuclear sales would let readers check the nuclear case directly, instead of inferring it from a market that also contains valves and pumps for refineries.
👓 Other Themes
A New Chief Executive Starts in January
Kevin Rayment, chief operating officer since the growth plan began, becomes chief executive on 1 January, and Bamford moves to executive chair. Gary Ogilby, the corporate controller, took the finance job on an interim basis in October after Chris Farkas stepped down. Three new segment presidents start as well. Rayment will set out his own targets at an investor day in May 2027.
A Stopgap Budget Runs to December 11
Roughly 70% of sales go to aerospace and defense customers, and Washington is funding the government under a temporary measure that expires on 11 December. Rayment said bookings have held up anyway, pointing to Navy shipbuilding money rising towards $66 billion and to direct sales to foreign governments, about a tenth of the portfolio.
💲 Other KPIs
The segment that makes actuators, sensors and surface treatments grew 14%, its fastest of the year and a fourth consecutive quarter of double-digit gains. Fighter-jet actuation led, with on-highway and off-highway vehicle parts adding to it. The full-year range calls for 10% to 11%.
Sales to airliner makers rose 6%, after 19% in March and 11% in June. Curtiss-Wright blamed the timing of avionics deliveries to manufacturers, while parts for narrow-body and wide-body production kept growing. The full-year range of 10% to 12% stayed where it was.
Borrowings less cash climbed by $89 million over nine months, after dropping through June, as the summer buyback drained the cash pile. Debt itself barely moved. A $200 million note falls due in December, which this year's cash generation should cover comfortably.
🔮 Guidance
Raised. The plan now has sales 8% to 10% above last year, about 9% in the middle. By our math it leaves roughly $1.03 billion for the fourth quarter, growth of about 8% and the largest quarter the group has reported. Fourth raise in a row, worth $30 million, $23 million and $27 million at the middle.
Raised. Operating profit should finish 12% to 14% higher. The middle of the range leaves about $209 million for the final quarter, roughly 12% more than a year ago. Favourable mix in naval work and restructuring savings pay for research spending that is rising faster than sales.
Raised by 0.1 point at both ends, to 60 to 80 basis points of expansion. By our math the fourth quarter has to clear 20.3%, which the group has managed only once in recent years. Every segment is now guided to a wider margin than last year, with defense electronics contributing the least.
Raised. Profit per share should land 16% to 18% above last year. The middle points to about $4.35 in the fourth quarter, some 15% more than the same period of 2025. Third raise of the year and the biggest: $0.18, then $0.15, then $0.25. Ogilby gave a top end of $15.50 on the call; the release and slides say $15.60.
Raised by $10 million at both ends, the largest of four moves this year. The middle leaves about $305 million for the fourth quarter, a little under the $315 million of a year ago, so cash growth for the year comes entirely from the first nine months. Higher spending on plant and bigger tax payments explain the gap.
Unchanged, the only segment range management left alone. Nine-month sales of $761 million leave about $304 million for the fourth quarter at the middle, which works out at 14% above the same period last year and 17% above the quarter just reported. The segment margin range also held, at 27.5% to 27.7%.
Cut by $5 million at both ends, even though Bamford announced a $30 million plant expansion in Texas days before the results. Grants covered $17 million of the quarter's bill, which is why the cash cost came to $23 million against gross spending of $40 million. The slides still describe "Accelerated growth investments in 2026, highlighted by N&P segment facility expansion".
❓ Key Questions
How much revenue moved out of the fourth quarter?
Bamford confirmed the electronics unit shipped some sales early but gave no figure. Without it, nobody can judge whether the unit is growing again or simply pulled work forward from December.
What are commercial nuclear sales today?
The nuclear case drives the whole story, yet the figure appears nowhere. Readers can only infer it from a market that also holds refinery valves and subsea pumps.
How many reactor pumps, and when does the money arrive?
Ogilby expects revenue in 2027 if an AP1000 order lands this quarter. The number of plants, the content per plant and the shape of that revenue are all still unsaid.
Why trim the capital spending plan now?
Management cut this year's capital budget by $5 million in the same month it announced a $30 million expansion. Either projects have slipped or grants are covering more than planned.
What will memory chips cost in 2027?
Rayment said prices are climbing and that 2026 parts are secured. He did not say what the higher prices do to next year's electronics margin, which is already the weakest line in the guide table.