Curtiss-Wright's cash target rises after a weaker cash quarter

Curtiss-Wright raised its annual sales, profit and free-cash-flow forecasts as orders for aerospace, defense and nuclear equipment continued to grow. Its latest quarter, however, produced less cash than a year earlier.

The industrial supplier now expects $595 million to $615 million of free cash flow in 2026, up from $585 million to $605 million. That is a stronger annual target after a quarter in which operating cash flow fell and spending on capital projects more than doubled.

The difference matters because Curtiss-Wright is funding growth while returning cash to shareholders. Strong orders support the outlook; investment spending, taxes and grant receipts help explain why quarterly cash did not move in the same direction as earnings.

The order book supports the upgrade

Third-quarter orders rose 15% to about $1.1 billion. The $4.6 billion backlog was 12% above December's level, giving Curtiss-Wright more work to deliver in future periods.

Sales rose 10% to $952.6 million. The Naval & Power business benefited from submarine production, aircraft-carrier overhaul work and commercial nuclear projects. Its adjusted operating margin rose to 18.6% from 16.6%.

That strength helped offset a less profitable quarter in Defense Electronics. Its sales rose, but its adjusted operating margin fell to 27.0% from 29.2%, with management pointing to an unfavorable product mix.

For the full year, Curtiss-Wright now expects sales of $3.795 billion to $3.840 billion and adjusted earnings of $15.40 to $15.60 a share. August's ranges were $3.768 billion to $3.813 billion and $15.10 to $15.40 a share. The lower share-count assumption also supports earnings per share as buybacks reduce the number of shares outstanding.

What changed in the cash forecast

Research by Ticker Byline shows that the annual free-cash-flow range is $10 million higher at both ends than in August, while the capital-spending range is $5 million lower. The latest spending forecast is $105 million to $115 million, versus $110 million to $120 million.

The forecasts do not provide a complete bridge between those changes. They do show that the stronger cash target comes alongside a lower spending range, as well as higher expected sales and operating profit.

Actual quarterly operating cash flow fell to $180.4 million from $192.8 million. Curtiss-Wright attributes the weaker free-cash-flow result to higher capital investment and tax payments, which more than offset higher cash earnings.

Gross capital spending reached $40.0 million, up from $16.9 million. But $17.0 million of capital grants reduced net spending to $23.0 million. The company deducts that net amount from operating cash when calculating free cash flow, which was $157.4 million, down from $175.9 million.

The wider period looks stronger: nine-month operating cash flow rose to $355.9 million from $290.7 million, and free cash flow increased to $300.1 million from $238.6 million. The latest quarterly decline sits within an improved year-to-date cash record.

Growth investment competes with buybacks

Curtiss-Wright paid $381.7 million for share repurchases in the first nine months. It expects total 2026 repurchases of about $460 million. Cash at September 30 was $281.1 million, down from $371.3 million at December 31.

Debt principal stood at $957.5 million, including $200 million of notes due in December. The company had $975 million available on its revolving credit facility after letters of credit, giving it additional funding flexibility.

New business also brings a need for capacity. In late October, Curtiss-Wright announced a $30 million expansion of its Round Rock, Texas, operation to make more sensors and support nuclear and industrial products. In November, it announced Navy-related contracts worth more than $225 million, with work continuing through 2030.

The near-term test is whether the stronger order book and profits deliver the higher annual cash target while Curtiss-Wright funds that growth and its buybacks. The Curtiss-Wright company profile tracks the forecast history, cash-flow definitions, debt maturities and operating developments.