Curtiss-Wright raises full-year guidance after Q2 beat, nuclear order window opens

Curtiss-Wright (NYSE: CW) raised full-year guidance across the board following its August 6 second-quarter 2026 earnings call, where free cash flow climbed 37% to $160 million and operating income grew 12% against just 5% revenue growth. The next confirmable milestone is a Westinghouse AP1000 reactor coolant pump order that management expects before year-end.

The numbers

Second-quarter sales reached $924 million. The margin story moved faster than the top line: operating income expanded at more than double the pace of revenue, pushing margins up 110 basis points. Bookings rose 8% in the quarter, book-to-bill above 1.1x. Year-to-date orders are running 12% ahead against 9% sales growth, a book-to-bill above 1.2x that typically previews revenue a few quarters out.

Defense Electronics orders climbed nearly 50% year-over-year in the quarter and more than 30% year-to-date, driven by turret drive stabilization systems for international ground vehicles and tactical communications gear for the U.S. Army, Marine Corps, and Air Force. The Aerospace and Industrial segment posted sales growth of 12%, operating income growth of 25%, and margin expansion of 180 basis points, helped by actuation equipment demand tied to the Army's IFPC program. Naval and Power full-year sales guidance was raised to 7% to 9% growth.

Nuclear is the multi-year variable management keeps flagging. The Department of Energy issued a conditional $17.5 billion loan commitment in June 2026 for up to 10 new Westinghouse AP1000 reactors, and Curtiss-Wright's reactor coolant pumps sit on the expected long-lead equipment list. A DOE launch customer toured the company's facilities in July 2026, and management expects a firm order before year-end.

What the setup carries

The third-quarter guide shows where the friction sits. Management expects Defense Electronics sales flat sequentially, with operating income and margin declining as favorable first-half mix normalizes and R&D spending rises. Companywide, third-quarter operating income and margin are projected flat before what management called a record fourth quarter. Capital expenditures are expected to rise almost 30% year-over-year, and General Industrial sales guidance sits at just 1% to 3% growth, the softest of any segment Curtiss-Wright serves.

Defense Electronics segment sales fell 3% in the quarter as tactical communications orders shifted timing, though the segment still posted a 28% operating margin. Naval and Power orders also declined year-over-year on submarine defense order timing. Lumpy government contract timing is the structural caveat this story carries across every cycle.

Hedge fund ownership of CW fell from 59 to 52 funds in the most recent quarter, a trimming move that arrived alongside better operating results. Short interest sits at 2.20% of float. That mix points to position sizing rather than organized skepticism about the business itself.

What to watch: the AP1000 equipment order and the Defense Electronics order conversion that management's fourth-quarter record print depends on.

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