Curtiss-Wright Corporation (NYSE:CW) is scheduled to report Q3 earnings results after markets close for trading on October 28, 2020.
The company is expected to report earnings of $1.54/share on revenue of $566.5 million. The consensus earnings per share (EPS) of $1.54/share is based on a poll of 5 analysts and represents a decline in eps of −21.2% over the same quarter last year, when the company reported earnings of $1.95/share.
The revenue forecast of $566.5 million based on a poll of 5 analysts implies a year-over-year (YoY) decline in revenue of −7.9%. Last year the company reported $614.9 million in revenue for the quarter.
| Metric | Expected | Prior Year | YoY Change |
|---|---|---|---|
| Revenue | $566.47 | $614.88 | −7.9% |
| EPS | $1.54 | $1.95 | −21.2% |
Earnings Call Trends
Management has been great at managing analyst expectations historically. The company has a perfect record over the last 8 tracked quarters of exceeding earnings guidance.
What are your expectations from Curtiss-Wright Corporation for earnings this quarter? Let us know in the comments!
| Quarter | Expected | Reported | Surprise | Result |
|---|---|---|---|---|
| Q2, 2020 | $1.28 | $1.31 | 2.6% | Beat |
| Q1, 2020 | $1.29 | $1.34 | 3.6% | Beat |
| Q4, 2019 | $2.08 | $2.12 | 2.0% | Beat |
| Q3, 2019 | $1.83 | $1.95 | 6.6% | Beat |
| Q2, 2019 | $1.77 | $1.90 | 7.1% | Beat |
| Q1, 2019 | $1.16 | $1.30 | 11.6% | Beat |
| Q4, 2018 | $1.75 | $1.90 | 8.8% | Beat |
| Q3, 2018 | $1.56 | $1.70 | 8.8% | Beat |
In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 8.9%.
| Report Date | Price Day Prior | Price Next Day | Change % | Result |
|---|---|---|---|---|
| August 3, 2020 | $89.12 | $97.01 | 8.9% | Increase |
| May 6, 2020 | $97.27 | $91.12 | −6.3% | Decline |
| February 26, 2020 | $133.51 | $123.06 | −7.8% | Decline |
| October 30, 2019 | $129.99 | $135.25 | 4.0% | Increase |
The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.58, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.58 implies a 0.5% chance of earnings manipulation.
Fundamentals And Technical Analysis
Curtiss-Wright Corporation is currently trading at $91.07/share, down −3.4% for the day. The company is trading at approximately 60.8% of its 52-week high of $149.90/share. The company’s stock price is down −6.1% since the last earnings report and down −3.5% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 40.32 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.
The current share price implies a price-to-earnings (P/E) multiple of 14.87 and a forward P/E multiple of 13.75.
Curtiss-Wright Corporation’s current share price also implies a price-to-book (P/B) multiple of 2.21. The following table summarizes some other key fundamental ratios:
| Metric | Value |
|---|---|
| Last Reported Fiscal Period Key | FY2020.Q2 |
| Period End Date | June 30, 2020 |
| Stock Price (Current) | $91.07 |
| P/E Ratio | 14.9x |
| P/E Ratio (Fwd) | 13.8x |
| PEG Ratio | −1.4 |
| Total Debt / Total Capital | 19.9% |
| Levered Free Cash Flow | $263.2 million |
| EV / EBITDA | 9.4x |
Curtiss-Wright Corporation is a mid-cap stock with a market capitalization of $3.786 billion and a total enterprise value of $4.603 billion. The company operates in the Industrials sector and the Aerospace & Defense industry.
Curtiss-Wright Corporation, together with its subsidiaries, designs, manufactures, and overhauls precision components, and engineered products and services primarily to the aerospace, defense, general industrial, and power generation markets worldwide. The company operates through three segments: Commercial/Industrial, Defense, and Power. The Commercial/Industrial segment offers industrial vehicle products, such as electronic throttle control devices, joysticks, and transmission shifters; sensors, controls and electro-mechanical actuation control components, and utility systems used in commercial aircrafts; valves for use in the industrial markets; and surface technology services, including shot peening, laser peening, coatings, and advanced testing. The Defense segment provides commercial off-the-shelf embedded computing board-level modules, data acquisition and flight test instrumentation equipment, integrated subsystems, instrumentation and control systems, turret aiming and stabilization products, and weapons handling systems; and avionics and electronics, and aircraft data management solutions to the commercial aerospace market. The Power segment offers hardware, pumps, pump seals, control rod drive mechanisms, valves, fastening systems, specialized containment doors, airlock hatches, spent fuel management products, and fluid sealing products for nuclear power plants and nuclear equipment manufacturers; and naval propulsion and auxiliary equipment, including coolant pumps, power-dense compact motors, generators, steam turbines, valves, and secondary propulsion systems, as well as ship repair and maintenance services primarily to the U.S. navy. Curtiss-Wright Corporation was founded in 1929 and is headquartered in Davidson, North Carolina.
