Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported August 5, 2026 · Beat 7 of last 7 quarters
Curtiss-Wright Corporation reported Q2 FY2026 revenue of $924M, in line with consensus, and EPS of $3.72, a beat of 3.0%.
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Curtiss-Wright's record Defense Electronics order book — up nearly 50% year over year — and its positioning across Golden Dome, tactical data links, and launcher programs suggest rising demand for ruggedized compute, communications, and actuation content as U.S. and allied defense networks are modernized. The company's commercial nuclear franchise, including reactor coolant pumps for Westinghouse AP1000 reactors and content on every reactor in North America and South Korea, positions it as a potential supplier to the power infrastructure that data centers and AI workloads will require. Its $80 million Chesapeake expansion and $95 million in maritime industrial base funding indicate capacity investments tied to naval and nuclear demand that could support longer-term growth.
Curtiss-Wright reported Q2 2026 sales of $924 million, up 5% year over year, with operating income up 12% and operating margin expanding 110 basis points to 19.4%. Diluted EPS rose 15% year over year, slightly ahead of expectations, and free cash flow of $160 million improved 37% with 115% cash conversion. New orders grew 8% with book-to-bill above 1.1x; Defense Electronics orders grew nearly 50% year over year and are up more than 30% year to date, while Naval & Power orders declined year over year on the timing of submarine program awards following a strong Q1. Segment sales: A&I grew 12% with operating income up 25% and operating margin up 180 basis points; Defense Electronics sales fell 3% as expected on tactical communications timing but delivered a stronger-than-expected 28% operating margin, up 120 basis points year over year; Naval & Power sales grew 7% with operating income up 12% and 80 basis points of margin expansion. Year to date, orders are up 12% against 9% sales growth, producing a book-to-bill above 1.2x.
Curtiss-Wright raised full-year 2026 guidance across the board: total sales now expected to grow 8% to 9%, driven by more favorable outlook in defense and general industrial markets, operating margin to a record 19.1% to 19.3% (50 to 70 basis points of expansion), diluted EPS to $15.10 to $15.40 (up 14% to 16%), and free cash flow to a record $585 million to $605 million. Management expects operating income growth to outpace sales growth, with a strong second half weighted toward a record fourth quarter featuring operating margin in excess of 20%. By segment, Defense Electronics to 4% to 6% sales growth with margins of 27.5% to 27.7%; and Naval & Power to 10% to 11% sales growth with 50 to 70 basis points of margin expansion. Lynn Bamford highlighted that the company is on track to exceed all major financial metrics issued at its 2024 Investor Day, and said updated long-term financial targets will be shared at an Investor Day planned for the second quarter of 2027. On commercial nuclear, management said it continues to expect a first AP1000 reactor coolant pump order this year, citing a June DOE conditional $17.5 billion loan commitment supporting up to 10 new AP1000 reactors. The company also announced an $80 million multiyear expansion of its Chesapeake, Virginia facility and noted it has now been awarded approximately $95 million in maritime industrial base funding to date, up from $70 million at the end of March.
“We have a robust and growing pipeline, which continues to demonstrate positive momentum across our”
on Order pipeline momentum
“We installed a bunch of different tools, took on some different approaches to how we managed our inventory and those are serving us well. And I think we are in very good shape. Really, the team is we are largely secured for our 2026 revenue, and the real focus at this point is positioning for 2027.”
on Supply chain readiness
“Overall, we continue to expect an AP1 thousand order this year.”
on Commercial nuclear AP1000
Orders have been exceptionally strong for several quarters at $1.1 billion to $1.2 billion, well above the ~$925 million average revenue level in the first half of 2026. Can you talk about the duration of the backlog and how those strong order rates translate into higher revenue?
Chris Farkas said the order book momentum is strong and Q3 is shaping up well, driven by alignment of technologies to U.S. and international defense budgets. He noted the earlier Defense Electronics order delays tied to the continuing resolution have corrected, with Q1 orders up 18% and Q2 up a record 47% year over year, including longer-term items like the multiyear C-17 program and long-term turret drive stabilization production orders. Commercial aerospace orders remain strong on Boeing and Airbus ramp, and the industrial vehicle order book is up 21% year to date, which he said speaks positively to 2027 and beyond.
The pivot to growth strategy is tracking ahead of 2024 Investor Day targets. Conceptually, are the building blocks — Golden Dome, submarine production acceleration, commercial nuclear with AP1000 and SMR, plus strong A&D cycles — enough to support double-digit revenue growth over the next three years, potentially mid-teens?
Lynn Bamford said the company is well above its 5% target at 9% organic and 10% overall revenue growth, and pointed to a 2027 defense budget of potentially $1.5 trillion, continued commercial aerospace ramp, and early days in new-build commercial nuclear with a first AP1000 order expected this year. She emphasized R&D investment has outpaced sales for 5.5 years and will reach six years by year-end, and that early investments are compounding into future growth. She deferred detailed long-term targets to the Investor Day planned for Q2 2027.
Aerospace & Industrial guidance implies around 20% second-half margins versus roughly 17% in the first half. Can you describe the puts and takes, especially as commercial aerospace looks down about 8% sequentially despite Boeing and Airbus production rates rising?
Chris Farkas said commercial aerospace orders remain strong with Q2 up 11% and full-year growth guided at 10% to 12%. He said the segment's sales guidance was raised by $15 million to $17 million on aerospace defense and general industrial strength, and that margin uplift reflects favorable absorption in line with historical 20% to 25% incremental levels, favorable mix including higher-margin EM actuation, and current- and prior-year restructuring savings, partly offset by higher second-half R&D investment.