CW Q2 Deep Dive: Defense and Nuclear Momentum Amid Market Caution

Aerospace and defense company Curtiss-Wright (NYSE:CW) reported Q2 CY2025 results exceeding the market’s revenue expectations, with sales up 11.7% year on year to $876.6 million. The company expects the full year’s revenue to be around $3.41 billion, close to analysts’ estimates. Its non-GAAP profit of $3.23 per share was 3.3% above analysts’ consensus estimates.

Is now the time to buy CW? Find out in our full research report (it’s free).

StockStory’s Take

Curtiss-Wright’s second quarter results for 2025 reflected strong growth across its key defense and commercial nuclear markets, though the market responded negatively following the release. Management attributed the quarter’s performance to robust demand in its Naval and Power segment and ongoing momentum in Defense Electronics, supported by a 12% year-over-year sales increase. CEO Lynn Bamford highlighted the company’s “continued deployment of our operational growth platform,” which enabled higher organic growth and margin expansion. Management also noted the impact of strong order intake, with a book-to-bill ratio above 1.1, and a growing backlog that now exceeds $3.8 billion.

Looking ahead, Curtiss-Wright’s guidance is supported by anticipated growth in global defense spending and an expanding pipeline in commercial nuclear projects. Management expects ongoing investments in research and development and new partnerships in emerging areas like small modular nuclear reactors to drive future performance. CEO Lynn Bamford pointed to alignment with U.S. Department of Defense priorities and the acceleration of NATO and allied defense funding as key growth drivers, while also emphasizing opportunities from executive orders supporting new nuclear construction: “Curtiss-Wright remains in a prime position to leverage its deep commercial nuclear experience to serve this global resurgence in demand.”

Key Insights from Management’s Remarks

Curtiss-Wright’s management attributed the quarter’s performance to operational gains in core defense programs, growing nuclear opportunities, and disciplined capital deployment, while also flagging external challenges and strategic investments.

• Naval and Power segment growth: Strong sales were driven by the ramp-up of the Columbia-class submarine program and higher aftermarket demand in commercial nuclear, including support for new small modular reactor (SMR) designs and increased maintenance activity for U.S. reactors.
• Defense Electronics momentum: The segment benefited from higher embedded computing equipment sales for European fighter jets and U.S. unmanned aerial vehicle (UAV) programs, as well as growing tactical communications revenues tied to modernization projects and vehicle upgrades.
• Commercial aerospace recovery: Management noted solid original equipment manufacturer (OEM) sales growth due to increased production on narrow-body and wide-body platforms, reflecting a rebound in global air travel and the company’s broad customer base across multiple aircraft programs.
• Operational excellence initiatives: The company credited improved throughput and commercial/pricing discipline—especially in Defense Electronics—for driving operating margin expansion, while also warning of potential disruptions from ongoing restructuring and an enterprise resource planning (ERP) system implementation.
• Capital allocation actions: Curtiss-Wright increased its share repurchase authorization by $400 million and raised its quarterly dividend by 14%, underscoring a focus on returning capital to shareholders while maintaining flexibility for strategic acquisitions and investments.

Drivers of Future Performance

Management’s full-year outlook is anchored in sustained defense demand, expansion in commercial nuclear, and continued operational efficiency, but also recognizes timing risks from government order patterns and ongoing investments.

• Defense market tailwinds: Curtiss-Wright expects growth to continue from alignment with U.S. and allied defense modernization, including increased foreign military sales and participation in large-scale programs such as Golden Dome and next-generation command and control. Management flagged a 20% expected rise in direct foreign military sales, though delays linked to government funding resolutions could affect quarterly phasing.
• Nuclear market expansion: The company anticipates accelerated growth in commercial nuclear through new build and aftermarket projects, leveraging partnerships like Rolls-Royce SMR and the Westinghouse AP1000 reactor. Management cited executive orders incentivizing new reactor construction as a long-term driver, but noted the need for capacity investments and careful alignment with customer timelines.
• Operational and margin discipline: Ongoing restructuring, ERP implementation, and increased R&D spend are expected to support future margin expansion. However, management is cautious about potential disruptions from business system transitions and variability in segment mix, particularly in Defense Electronics.

Catalysts in Upcoming Quarters

In the coming quarters, our analysts will focus on (1) the pace of order conversion and backlog monetization in defense, especially as government funding dynamics shift; (2) evidence of accelerated growth in commercial nuclear through new SMR projects and AP1000 reactor awards; and (3) Curtiss-Wright’s ability to maintain margin expansion while executing ERP upgrades and restructuring. Progress on M&A and new product introductions will also be important signposts for the company’s strategic execution.

Curtiss-Wright currently trades at $470.26, down from $509.12 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).

Stocks That Trumped Tariffs

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.