CW - Earnings call transcript Q2 2021 | Curtiss-Wright Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Thank you for standing by, and welcome to the Curtiss-Wright Second Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] I’d now like to introduce Senior Director, Investor Relations, Jim Ryan.

Jim Ryan

Thank you, Andrew, and good morning, everyone. quarter conference second Curtiss-Wright’s to XXXX call. earnings Welcome

today and Vice Chief me and on Officer, President call the Farkas. Chris and Joining Executive are Lynn Financial Officer, Chief President Bamford;

associated Please webcast copy on and certain today call release today’s as projections and in replay our in are Reform XXXX. and presentation note the of download is risks statements A forward-looking with with available filings webcast Investor the of expectations this as public of Our website the uncertainties We Relations statements at financial not today’s include are that www.curtisswright.com. Act also our SEC. section the defined are being performance. forward-looking based These will as found current those future press Litigation well for website. statements can through be is Private management’s the a discussion guarantees our on Securities of detail of company and

company’s acquisitions at exclude otherwise reconciliations that adjusted translation, and foreign released is to financial organic valves classified earnings references and As current to both into for of prior MAX on the actuation and non-GAAP end fourth guidance noted. the operating ongoing reminder, exclude divestitures, in our effects restructuring, costs year full non-GAAP Curtiss-Wright’s presentation to the and which German and as business, provide are Also Any our XXX GAAP as held in of line for greater our growth include note order unless as currency results quarter. certain website. excludes periods the product available this our performance. sale that the in a supported year that the transparency view results adjusted program, build-to-print an well

call the Lynn Lynn? started. to get to Now I’d to things turn over like

Lynn Bamford

outlook. Then our the our begin financial of XXXX to I’ll our of a updates Chris review performance quarter call over results and overview you, an of I’ll full Jim, everyone. the morning, full and key to and guidance. Thank with highlights provide good detailed year year second our more turn to

up a we move the experienced increase remarks wrap to in strong we second I’ll Q&A. with XX% highlights, quarter our overall sales. Finally, Starting before prepared

defense were while commercial increased our encouraged are last within aerospace, XX% by XX%, the their sales pandemic our improving and and sequential industrial sales markets within aerospace in among Diving power hit we hardest Our deeper improved our we experienced the by general These markets process to markets year-over-year. conditions. and markets, markets. and improvements double-digit year commercial

in a Based strong performance, share generally were and the diluted our EPS XX% to second despite important our margin performance and XX%, excellence offset our our of points in It’s margins and while Looking in operating This on by tax adjusted benefits the year-over-year expectations. improved a strategically Naval $X rate, strong performance as a rates, with incremental activity. development $X.XX at profitability, income the compared slightly Power achieved while million our improvement reflects higher interest which solid operational above benefits as This basis of XX.X%. year. initiatives. and Aerospace well was reflects strong consistent Industrial, note and higher which the higher segments operating the this increased continued both operational we expense was growth that adjusted the based to as investment slightly adjusted upon was sales quarter, to research prior invest to repurchase XXX

quarter markets. off-highway segments. each carrier and results we on- surged book-to-bill we growth orders included orders. both covering of submarine in Naval orders, and products a for year-over-year second our second note, XX% which and X.X strong X.XX. in announced aerospace generated to platforms, of our our included Within market and strong record and sales Turning orders, a achieved earlier expecting quarter Of order three strong are commercial our one-time exceeded order activity for times in million as was book-to-bill half reflect an aircraft a within $XXX XX% markets, defense release we vehicle and also which This industrial our overall press

XXXX Next per margin where to diluted our sales, full and year we adjusted raised earnings our guidance, operating income, share.

full we improved in top additional some an industrial are to line the reflects increase our growth in to guidance markets, rate. updated XXXX. deliver our will and to positioned the detail Chris take well support upcoming R&D results strong but in you investment the Our summary, outlook year planned tax an through in slides,

Chris turn improved outlook I’d our quarter to thorough for Now second and more a of like to the Chris? to performance call review XXXX. provide our over

Chris Farkas

services good Lynn, results, led second we, and a financial and industrial in you, industrial XX% strong drivers everyone. of begin both our our I’ll year-over-year Thank by the key and activity. economic global is of was off-highway also in where with increase sales steady sales which The and improved demand solid morning, another improvements in for the this sharply surface by segment, products approximately markets, Starting Aerospace for delivered vehicle performance. demand again, treatment to markets. from to quarter growth segment on- Industrial benefited driven strong

demand we platforms. our Within experienced products the market, narrow-body for sensors segment’s commercial aerospace on improved

continued slowdowns we offset by were wide-body on as platforms. several expected, However, mainly those gains

not narrow-body half aircraft even market of to a XXXX. XXX Longer-term, this until ahead AXXX. by production or see XXXX, to we aircraft fully of narrow-body production second and led we the prior XXXX recover expect while the an improved aircraft, within levels including by returning XXXX wide-body increased Looking may performance timeframe,

points results. experience from while results segment’s sales of operating Turning operational higher excellence in Electronics our is year-over-year Defense XXX%, increased shipments XX.X%, PacStar and and continue acquisition, This quarter. reflecting segment, reflect restructuring absorption operating another by both favorable second recovery we our track. adjusted container our quarter. benefits integration on to is year’s initiatives margin constraints quite basis and And adjusted chain In to electronic our the impact income supply ongoing revenues in this a remains the from profitability, increased the which increased XX% and dramatic strong its the savings. influences second XXX from Also well to last although to minor led performance on components, some overall executing was overall immaterial

Aside from PacStar, second an timing on organic sales quarter in various to were programs due defense. basis CXISR lower on aerospace

and million commercial the in mix $X $X of income Absence incremental equipment, supply these which results to year and programs. as and points process in principally and impact, increased continue customers nuclear supporting increased year-over-year. operating of nearly power Segment and unfavorable by valve experienced basis potential adjusted sales segment, XX%, XX in sum XX If we CVN-XX into would commercial margin unfavorable revenue drove adjusted in to with markets. Naval electronic experienced adjusted the stabilize for as performance. you for chains shortage operating acceleration prior to about In first process XX%, sales nuclear The margin higher well in and concerns higher propulsion the savings higher several points we restructuring sales XXX absorption operating been aircraft margins the carrier segment’s line Canada, aftermarket overall, markets, second Elsewhere, recall, an the our FX. margin took products quarter for higher both experience second action solid our components. their XX.X% we as the to while to To quarter operating due off-the-shelf million U.S. strong to Power performance Naval included up basis prior favorable investments, generated in our the operating R&D have growth income on expansion quarter increased actions. due the organic revenues,

of begin a end growth can sales we our of organic. continue submarine as blue to where total and highlighted CVN-XX class in slide. to made Curtiss-Wright Starting for higher is timing of X% outlook, Turning X% the to flat Virginia with driven year on expect by in guidance. from offset ranges And revenues changes expectations full XXXX updated you naval sales carrier slightly where X% see, aircraft few in defense, to revenues. we’ve X% our an up of X% market less which our guidance to I’ll the

defense has once overall our again for a sales our positions to to defense the base overall unchanged markets, market and which our at faster Curtiss-Wright growth growth for X% remains Our reminder to at X% than revenues DoD commercial sales In X%, aerospace is outlook budget. X%.

we of So each our the growth in end updated rates markets.

industrial see businesses. valve First solid in our process, we MRO power activity continue and for in rebound to a

anticipating guidance in we project gas and XXXX. a we’re our this market push And a result, X% large international end X% of as out XXXX to due to However, lowered oil into growth market. now the

We continued to year that for industrial XX%. operating industrial order sales and X% now increased expect outlook reflect reflect new And products, sales strong support XX% Continuing I’ll industrial year-to-date point in general the strong to performance book stated strong improved with a the a segment, and recovery begin XXXX Aerospace raised profitability that at path. and and outlook, growth full out our orders in of that to I’d the Industrial our sales based we guidance million we we’ve in higher industrial general to to markets. like have by Next on expect in XXXX the and Day, segment recent segment’s our in levels to to $X we’ve our vehicle grow the X% the market, income return we volumes. to where a range growth our vehicle market Investor

from operating points we’re us operating levels basis now to to range exceed margin year. profitability income XXXX up to track XX%, this XX.X% is XXX basis With to XX% segment to XX.X% points, projected these keeping our XXX projecting on to changes, grow

to Defense achieve guidance. Electronics our moving last our in on remain few highlight prior to segment, update. a we I while since track pieces wanted Next

pipeline. future a in of year-over-year additional million technology investments based strategic growth. expect We R&D $X to upon our for organic $X to fuel make pursuits First, in million now an total

the full the of Canada margin in year for dollar and terms in this U.S. operating the we in the the small a on FX, quarter, create some businesses second during weakening headwind will Next saw and UK. operating

holding impacts experienced modest revenues, our quarter. chain remains related the past electronics, persist on our we’re small availability expected some to minimally of segment the principally into while the a full-year this the item, of third supply the guidance. on And we’ve which particularly addition, watch few impact months, to over timing In we

the and basis to Naval Next solid sales points growth. our expansion guidance basis XX segment, margin we on and of in expect unchanged, continue remains to points XX Power

outlook, where to based to $X.XX in-line adjusted R&D to guidance, in to basis our increase total to expected by full-year of to X% investments, growth in income our XX tax reflects driven expect outlook which points to to ongoing reduction the diluted rate, restructuring be share sales. to excellence increased of financial law guidance benefits higher company-wide this initiatives. growth tax improve share a Note now our summarize our now EPS projected is points the to we which operating on full-year well and of with as to activity. with and range our time again count operating XXXX recent to prior is UK basis XX% as a higher that So impacts change Operating XX% in includes margin new of strong income. have overall upon also X% $X.XX, operational our repurchase XX%, X% adjusted profitability a ongoing we XX.X% grow our X% XX Continuing XX.X% reflecting and XXXX

be our we to third Over of fourth quarter with the quarter strongest quarter last in-line be diluted quarter year’s our months final expect to EPS six year. the the third XXXX, and of

$XXX full-year $XXX our of free cash to on greater to year historically, flow free achieve we’ve or seen as typically and Turning generated remain outlook, of we year-to-date to second track guidance in full million million. of year the we’ve $XX half we cash generate our flow our roughly XX% and the million

Now to some call the back Lynn turn over for closing I’d to Lynn? remarks. like

Lynn Bamford

Columbia nuclear submarine critical support and which believe release few including bipartisan the aircraft Day. Chris. Thank for with President’s The budget with to consistent the strong and the has like the reflected XXXX the since our continued CVN-XX revenues class our the for destroyer. I’ll enacted issued was after provides Investor spend us a future you, requests, FY May should which from We discussing potential our DDG they reasonably some base grow and observations upside, Virginia X% platforms, next ship minutes can strong the FY The Navy’s or a and for add budget growth most revealed, Investor another over we I’d and third budget and our carriers surface room support defense Naval plans. and Virginia CVN-XX approximately submarines. start the class recent U.S. was event. shortly thoughts and expectations Day XXXX

funding including of ongoing bodes support highlighted autonomous We the and vehicles all our also of expect This Electronics of encryption, for all release. priorities, which top strategic support unmanned the cyber, offering, the budget Defense well were for DoD’s in which these areas. product

increase initial spot in budget our as vote its a ongoing way an additional the the FY capitalize they among a Since the army decision forces. great across Pentagon’s battlefield Armed the modernization, position markets. X% modernization Army’s Senate our a XXXX billion, are the to X% the for provides defense $XX the cuts budget increase congressional of confidence funding modernization army recent single Services XX% greatest billion the to of increasing Committee Another makes prime ground to The in our seen was current through the bright $X.X Further, also not budget to Though behind to upgrade again optimism it year. markup. to in to then, budget the PacStar priorities. on acquire and provides have to growth represents up requests authorize by upside as confidence XXXX, signs we the which networks above of represent overall total is FY overall assumptions President’s the of this services final, organic long-term fiscal requests despite

thank Day Next, to participated. highlight takeaways who the key some and to I’d like say our from recent everyone of Investor you

led continued focus expansion. And expectations on to operating faster than renewed we by expect through our inorganic line and is Our organic operating a grow implies top both growth which strategy to acceleration, sales pivot margin achieve growth. sales, income which to

flow we minimum minimally digit XXXX Additionally, our new we’re in of and of cash growth on our a end long-term generation. growth markets. assumptions, strong targeting double-digit expecting free continued Based period over EPS each three-year organic ending sales guidance are in low-single the

achieving have of CAGR, We growth good sight end the including sales line on X% base PacStar by a of XXXX.

within we on end growth as our embedded from investments R&D In are organic in continued the our of these addition benefits markets, maximizing incremental key new platform. potential based on as to the expectations, growth operational our in contribution our well growth the focused

We that you our am at very are know, history. highest in And passionate as the reinvesting it’s an level area in business Curtiss-Wright’s I recent about.

updated by factors a investments critical total XXXX in investment Defense reflecting MOSA another technologies million and our our $XX $X guidance, our As as our you incremental growth million, highest saw we spending. business. in of increased end markets, R&D year-over-year Electronics in such at These are the and targeted

of provide to greater energy new growth and drive rollout and reinvigorating and focus, operational is from providing in the critical opportunities platform to to Additionally, collaboration attention growth pricing. management new all things commercial innovation strategic excellence the

in our vigor free to team or point up with expansion. result margin will critical we level continue be processes for the and investments which will As decisions. cover out dilution, to will could be acquisition we has focused short-term conscious XXXX. a distributed result, have same continued operational this money believe investment reduction, R&D cost drive to opportunities that to that dedication and excellence strong Further, it’s demonstrated commitment of I and since to These

acquisitions depending effectively shareholders. capital size into and share will long-term annual the timing of wanted to allocation of Therefore, of our Lastly, We share a on is $XX the reiterate incorporate base likely above the CAGR current Curtiss-Wright. to to to repurchases we for drive over three-year bring minimum to EPS greatest annually. that committed allocating period returns future XX% that target I remain activity year-to-year the our level to vary repurchase million our

with pipeline year. well-positioned and XX% feel strong to as very exceed Curtiss-Wright. attention very bring the acquisitions M&A optimistic on X% that strategic to I opportunities, deliver opportunity a more management Finally, will this we are of the sales summary, full we find into critical, we results have targets to In approach and

We diluted X% high-single both growth year. sales growth operating and in EPS and expect to to in XX% rate this generate a income digit

XX.X%, incremental margin to XX% in at to reach operating our in stands to margins on and guidance R&D to expand we investments remain continue XXXX our XX.X% including track now XXXX. Our

would conference we bottom cash open to allocation and are up we today’s and time, our remain Our to strong, maintain flow investing while adjusted capital strategy support that returns for and a like balanced for line value. continue long-term ensuring our capital free possible top healthy best call growth, I this to questions. drive to the At shareholder

Operator

Thank you. line Jones Stifel. first Nathan [Operator Instructions] from question the with Our of comes

Nathan Jones

everyone. morning, Good

Chris Farkas

Nathan. Good morning,

Lynn Bamford

morning, Good Nathan.

Nathan Jones

cost with the like commentary. start on I’d to question off the

a in a the up maybe second You quarter. potentially stocking had that XQ in to of decline customers led bit

the Do You’ll they channel that typically where seasonal Just half, would at still be ramp and how you into line color you see about normally you inventory the ramp. seeing that second give on think seasonal think can us ahead behind? in And inventory a still any do in that. anticipating customers? they’re of

Chris Farkas

that defense take get definitely to Yes, the in some to component accelerate QX, of try mean, ahead I sure. electronics shortage. looking one. saw I’ll we orders, customers,

So as work accelerated was year-over-year into this you that on some minor to QX. had experience delays had at million, about look that QX I just we $X been continue really electronic we mean, components. in that headwind organic

the our year. CXISR So fortunate the margin are products within But timing most this and it’s fairly Electronics impacting the market companies steep went given really higher revenues, mainly last a dynamic it’s what to revenues, of companies that aero in segment. out Defense ramp situation enough there through year most defense face

out we of of some But that be pressure put pressure And big as expect that Electronics second of based there as will the half upon on coming QX have the look at of we a ramp components. typically Defense of expecting this historically the business, will be timing and the we’re you’ve those you receipt that very QX. year. Now most again year, seen

currently we’re working our those in feel doing way pressures. overcoming we’re So through issues the like good a and job

Nathan Jones

And favorite I’ll back I R&D. to head guess Lynn’s then area,

at in are we Any You that guidance increased your continue that Whether forward? have this year. opportunities you to it R&D more the increased the level? plateauing about as quarter, about second there? that R&D you on to investment talk expense increase there us the target think go Whether for give think can you you that? as full we should opportunities Can

Lynn Bamford

is, you to an do stated, thank about. I that. you it And as for area So like talk

that, – a R&D additional traction gain then with up around industry, broad we So as investments in some just put defense really line outstanding some we’ve continue just broadening but modernization. in around across our to our some as see group the also around the and to opportunities product our technologies our encryption product line PacStar in additional the customers and Electronics GPS, it’s to initiative, with in continues range both cyber, MOSA battlefield expand the team denied Defense specific of really

just opportunities the continue to So grow.

great right that is feel positioned really invest. to the We time at really time are and right now a

were it, whether some in we’re make and think time to go-to are, that really this dividends specific that honestly, case in make that allocate The vehicles for vehicle we the important other R&D electric afraid working is area four Internet capital where building that. years next years that around our pushing who’s the knowing manufacturers. think other see we systematically see that’s that of lot are a And, But or vehicles really some are we and of in in looking going be are the into and And are and us. at three fit based of really area I secure and space and investment pay asked calendar and do really sometimes and are to up very to in we’ll out. are vehicles, within electronification, on tailored for And year, feel in ourselves to come. decisions to a their also And thing the leader that vehicles, really not area do leader, XXXX increasing we that making opportunities that our it’s investment hybrid with again, investments, space how growth, we technology R&D R&D parts do. best variants about for we’re a a we’ve electrification positioned investments A&I we’re or the before specific to specifically by And major takes to it’s giving frequently And guidance this will we in is right often on we’re around again and investment people to it’s that not? that go can the have products understand that them in we to sure to case, return margin. not long-term we to dividends, the opportunities it’s R&D year, where same we spend pay calendar balanced Things,

And just but you longer-term the balance make near-term not fueling also have your growth. immediate-term, so sure returns, again, you’re and to

trade-offs, the how organization the across those at we’re strategic investments are around those maturing we best look broadly our make investments. so the processes and And

Nathan Jones

Great. Thanks taking my for questions.

Lynn Bamford

Thank you much. very

Chris Farkas

Thank you.

Operator

you. Thank

UBS. the Your with comes next Walton Myles question line of from

Myles Walton

Thanks. Good morning.

Lynn Bamford

Good morning.

Myles Walton

and end Can optimism Lynn, you of talk sort on talked that one the Maybe, property full well being reaching target. at As the upper what any scales, year sizes, of and maybe and you’d about pricing, pipeline moment about end out? you the kinds of of sales M&A that’s other before like as very flesh about the you’d you the of the reengage do to close material? characteristics sort think

Lynn Bamford

Sure.

get and think done anticipations has in that selling tax honestly, companies year. things coming deals and law considering private PEs XXXX motivations, people’s to I upped on both So they were this changes some try

lot So is year. the of a the push deal properties the do to in active a pipeline, this for

going would but do deal deal I that we are to that strategic and to actually with fit, won’t pipeline. is always a move the markets area we that which have a defense diligence didn’t active that, say, targets the will the the we’re are we we’re most it’s whether not but be across some depend seeing in a majority deal, you’d on again, properties for a going do on say, sake, be as through Now, now. reiterate as again, deal right it right be disappointed do to that if we But largest of I is the now, number there’s financial high right active range. properties now, out we’re area there the that – us. does right of an that’s exclusively that it to It’s is not priority for seem our a

So that I especially we not can in mean, that Naval bring that’s only people electronics but one platform of offering. And buy current customer whether industries, well. base, an works a or is we’re and to sub to current the saying defense see we systems. complimentary something properties it’s where building additional being would we our it our area, product them

talk mean, so are more, I And there’s there’s – I The historically. know I kind very some being would prices line some the much. it prices multiples examples that’s more say, of with we’ve extreme. seen hasn’t of in and what being

with within good we’re would them think where line products finding what the in make I are and reasonable a multiples Curtiss-Wright. strategic quality fit

lot working ones best to that’s so processes, on fit do Curtiss-Wright. a management And quite have through would a – active that which few see now properties of attention we’re strategic that have the something of be we lot think we we a right for

to of revenues add the something of properties would in the seeing range portfolio think we PacStar types in chance. are calendar I We that So And coming year. are our available. a reasonable there’s

great right a healthy really it’s now. So pipeline

Myles Walton

the point and that nuclear on about the nuclear? with future there And fade be the be doing some OEMs. I’m you might great and cause Thank there That’s maybe X-energy, put other selection me of for something new the then Okay. familiar on shutdown color. Maybe reactivity not press to control would just day out maybe to on there and is side release the you. more optimistic OEM you on that system. reignite to the as what commercial build could the of the revenue

Lynn Bamford

thank So asking our press release thank you, first you reading for about and it.

don’t budget there this of is also a of by – Energy open And part to Energy FY put companies one spending – that funding program, I’ll support was of XXXX So X-energy of that. the two as increase on that overall an that significant and amount of budget the modular in with the got the advanced of areas I support the lot of of But reactors a reactors. – Department the funded was new future one development the for has from small DOE of is been Department new reactors. of forward

all new XX the with to of of both right And and I probably there’s are we very go mean, surely everybody in on those reactor and participate engaging that’s active public reactor there, development, And production. so out commercial their sector because will from private lot receiving out developments. there’s to companies not funding working roughly companies. a there now, that are

of got it’s field. you So situations the to those where cover one definitely

that we’ve we So have about. have started years on earlier And nicely for content go. you’re got for significant to ago. progress which new of the others these things where going partnered most we that, we’re talked some that – with really most still are continue several And the to I ones days where winning think content. scale It’s the

I think tens various per from of Investor might talked tens of many reactor. dollars we of revenue on millions reactors about types to the ranges get Day we in our about

I and it’s processed activity, That overall more. Europe of for licenses as more being of There’s hearing from recognized I not that’s think pre-energy without And we’re so that part there it think to I just those being say, lot we’re get and needs And recognized that. countries think the in to nuclear a more going ever press being the the be a recognizing carbon nuclear. Eastern government and worldwide. over is sentiment becomes the administration, Biden

going light sure. isn’t to be decade us or XXXX, on for but for XXXX this to so it’s this fire And in area strong going a

Myles Walton

I $XX quarter, income, there on And income question. think for modeling other great. you’re one guiding virtually clarification the still anything specific or drove was detailed year. quarter? million guess, the lighter that Okay, $XXX,XXX, to $XX Chris, the it in the Was million and I in other the clear breakeven

Chris Farkas

as there’s look I think that, what’s the we extent to other pension you associated it’s I seeing you mean, that’s along – with mainly comes had that are the retired during but and know the We process former recently with And and really at happening as did pension. really drop that year-over-year, it. executives it’s quarter. full income of true-up No, payments kind really of just some

Myles Walton

Thanks. Okay.

Chris Farkas

Sure.

Operator

our line Thank question of with Securities. from Michael comes next Ciarmoli you. And the Truist

Michael Ciarmoli

Hey Good guys. questions. Thanks taking for the morning.

Chris Farkas

Good morning.

Michael Ciarmoli

talk parse order the give said out out, segment can outside maybe very more about the it can but was bookings on environment? Defense Chris, industrial, by any the called flow I and you you maybe you of have which broader book-to-bill, maybe think portfolio and color the strong, even if curious about Naval you

Chris Farkas

I Yeah, sure. segments. one across were for in three of the book-to-bill commercial all XX%. year. note versus our side, – you and one on just look last think we A&D I also time We our about bit we QX. that A&D lumpy. we each one and that’s in a times stronger quarter. segments, on big than defense the deeper and and now were bit up orders we year, enabled year overall this very strong were received bit orders, and were But so year-over-year another side second This $XXX the times and quarter, mean, up at are not million what our above overall strong orders happened times Aero commercial, saw up, year $XXX we that but shy press a X.X It’s we should XX% or we a QX, release XX and QX dive last A&D got commercial very a a We to is in we stronger had take the of million backlog a million we important a little expecting little orders in issued flat, one little

out orders. be another us in year So it’ll year-over-year. level It’ll for strong

the and up that nuclear vast our a happened As on- but $XX products, at majority we’re for and with of the you and we year. aftermarket, quarter recovery, vehicle overall XX% orders, related off-highway book-to-bill million on or positioning that some look GI strong take to and I year-over-year, and mean commercial were very full pleased great there, what

Michael Ciarmoli

specific kind of defense How ex-Navy, was the you’re defense?

Chris Farkas

did defense But their bit PacStar that in pressure benefit the that due to ranged of really in ex-Navy, slightly aero see what defense. that field acceleration from mean first we I orders mainly little above that and saw CXISR for was so a acquisition, the PacStar, we were We quarter. did Yeah, in quarter. sales

we look as of year I Naval our a in for the back So improvement – Aero across that, we’re electronic Electronics. the both outlook, half and for expecting Defense is sequential orders think Defense orders

good we’ve think got a second and ahead us expecting trajectory of half. good So I we’re a

Michael Ciarmoli

of sliding I mean, you program that are seeing risk F-XX. call or it what you You impact? we’ve suppliers got but any F-XX? the forward, obviously timing see is And seen you’ve there, called Okay. the kind to do there? is in some pull I know some out with right the out content

Chris Farkas

I know, electronics very seeing support out I we’ve we’re our terms really program a our platforms agnostic business. very, that of No, got have we there. and products, mean, of defense you we the delays, across and in approach the as anything mean, wide a anything range industry of to not fairly development defense

were its in working anything feel we that, hear related a did issues mostly you great the seeing mention, relative working are issues doing but that’s We those and there that. electronic through some and way unusual. we small not to timing through of team’s components, timing like We’re job the availability

Michael Ciarmoli

of it. I AXXX. wide mean, legacy mean, are mean we – bodies. and set exposure so on neo bodies, one MAX outside Can got on us, at maybe you portion of you focused the presumably MAX, one, just I this talking any narrow aerospace and right narrow Got the with were last the now. content commercial just I has Is you more a on point XX level you it, bodies, real just just the it outside have the Maybe obviously got still good

Chris Farkas

set. Yeah. mean there, on XXK per a out ship throw I we numbers XXX few still mean, just MAX, the to have I Boeing

in back business and expect the year, the year. So we here benefiting from from we that are ramp is we half even build away though a see what still last to of walked print

month to XXXX. plans XX We’re producing per ramp therefore are in and line to early with by Boeing their

pick our the So would material of delays And on I half what kind. we’ll ship but up back tell to program, business. XXX here in definitely narrow-body that it’s not the see some temporary some the overall per on in do XXXK year program, and there’s we set. you been Yes,

expecting aero to the that back half the in second We the they’re expect up that And flat. relatively on year. we’re full-year, be commercial going to of here pick

that’s get Some relative the beginning the headwinds more that of expect but deeper narrow-body as ramp year wide-body, up year. we here in than into a at going to we the offset to

Michael Ciarmoli

Got for it. the guys. Thanks color

Chris Farkas

Yep. Thanks, Mike.

Operator

Our Peter Instructions] comes from next question Arment line the of Baird. [Operator with

Peter Arment

electronics just X% But and a so down Yeah, maybe softer it’s for quarter, a helpful. a and the little your what year-to-date, guess QX just we Chris, the Christian. X% so purposes, a clarification color you It’d or on a of bit just a growth quarter, there. good be relative bit. cadence morning, to fourth called stronger modeling kind Lynn defense little of experienced much was then and down in out just – kind just little are I you expecting

Chris Farkas

revenues a got ramp We’ve Yeah. QX aerospace here this in sequential year. defense QX to

to typically certainly should defense is our revenues have we strongest and but QX electronics it Yeah, quarter will say, sorry, QX our I So I’m in strongest QX. in quarter.

continued see here the our will we be will in half So of strongest. year, improvement yeah, back the QX

little of And EPS associated temporary soft here, talked bit facing in think most defense here timing on script you our is this we’re the as I what guide QX. with that in look a think, year-over-year, issue at in about flat I QX-to-QX, we electronics.

Peter Arment

Okay. How the for about you similar? as that And year, progresses that then defense back would in just strong and think mean we just little of softer on obviously kind snapping a just should expect, incremental, as electronics. very aero I in industrial,

Chris Farkas

I Yeah, mean we margins. do XX% to XX% incremental

fair to as the year. here initiatives, go seeing gate. but full certainly slight and way a places that’s QX out good few mean, our starting think benefit in we’re here some We’ve throughout into it things as continue a the associated traction with of look get that’ll operational are excellence at on the to good year. some you I I we that, on got deeper

absorption. group of costs faced I impacts great it that to back half think year. down we’re some of expecting for kind QX, of to the to chain call the see a bit there. some mean, I’ll shut in we we year of when freight some supply the had and around that get Mexico very actually a we earlier from at of talked I – and material we mean, as you get particularly And this overall some see about little to expediting in facilities that. we’ll recall, that issues minor and industrial look if year ahead I aerospace of few last a a months you just couple pickup

there’ll we’re a have revenues the lot what So the seeing outlook look through there. out good year-over-year, expansion XXX just strong and reflect that of coming the really for rest order and I and absorption ramp basis volume good at be year. when in our expect of to increased it’s we We segment things vehicle industrial a strong points sales and that guidance to of you mean, just of

Peter Arment

is not operate they, Thanks. either on general, a flatten Appreciate little get follow budgets out sometimes as down highlight environment. versus that that peers or or that much how could your your positioned business you just outsourcing that And how just Maybe you just maybe path. doing as kind going of think then that. in will hear defense potentially a electronics we in up not OEMs, about one, softer, maybe back and kind or of just as

Lynn Bamford

think us during this started right to MOSA back that in lot investments And across SOSA, on keen very spend been to return was support invested. with investment we’ve to grow carefully, very eye be outsourcing something And releases XXXX highlight tri-service put Day that. with branches We available product toward the working budget and than us XXXX talked offering outsourcing that the push Well, the investing Investor and position better great that the where with positioning I really I in towards to think in defense and press R&D MOSA, strategically push future, we puts and have we for we the memo about the out of to think, on will a industry. with we’ve we that three all made products. the the programs defense at a will the foreseeable the we the to some our a very in right the product continue our during that looking back

being encryption, we army and we’re area an technologies but the offering, some same product that focus that journey there that of believe where I read to and modernize we’ve that similar they’re be beginning is continues then battlefield. with area able in made GPS across is that capability. outsourcing positioned early denied aerospace like, us XX-year push investments that look opportunities the The across to gives so being it’s services quite to the growth. the at in And And days for towards this to for frankly, of it’s really PacStar things technology positioned a that the the the to other delivering

So there’s continue we reasons to do that a defense of outpace budgets feel much. to about the very lot strongly so our ability

Peter Arment

Thanks Appreciate so much. details, all Lynn. the

Lynn Bamford

Thank you.

Chris Farkas

Thank you.

Operator

I’m showing you. further Thank no questions.

Officer I’ll over turn back that, any for remarks. and with President So call Executive the Lynn Chief closing Bamford to

Lynn Bamford

have great day. I will earnings our today. during forward you simply quarter thank third we speaking call and to conference for again a say And you us joining look with

Operator

This concludes today’s for call. you conference participating. Thank

disconnect. now You may

Curtiss-Wright (CW) 4 Aug 212021 Q2 Earnings call transcript