Having once owned Curtiss-Wright
That's not to say that third-quarter results weren't all right, even though they were a bit below both top- and bottom-line analyst estimates. Sales rose 15%, helped along by 8% organic growth, and the operating margin expanded nicely. With better margins, operating income rose 27%. Higher interest and tax expenses ate through some of that amount, though, and net income was up 19% for the quarter.
As new orders of 16% might suggest, the pace of overall business is pretty good. The metal treatment business saw double-digit revenue growth and benefited from both the commercial aerospace market and, oddly enough, the automotive market. Motion control revenue rose 13% with good growth in military programs at Boeing
While these are certainly better days for the aerospace, oil/gas, and even some parts of the defense market, management nevertheless revised guidance in a slightly negative direction. I'd say that the culprits -- a strike at Boeing and a changed procurement decision from the Navy -- are out of management's control, but it's still not good news.
Looking at valuation, I don't see any appealing discount to entice me to buy shares in a company heavily exposed to cyclical markets and revisable federal budget decisions. I like that the company does a good job of separating organic growth from reported growth in its earnings, but a little added clarity doesn't in itself make for much of an economic moat or margin of safety.
For more fly-away Foolishness:
Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).