Woodward (WWD) Beats on Q1 Sales, Lifts 2018 Earnings View
Woodward, Inc. WWD reported first-quarter fiscal 2018 adjusted earnings of 53 cents per share, which missed the Zacks Consensus Estimate of 60 cents by 11.7%. The bottom line declined 27.4% from the
prior-year figure of 73 cents.
Adjusted earnings included a one-time expense of 24 cents per share, courtesy of the latest U.S. tax legislation.
Woodward, Inc. Price, Consensus and EPS Surprise
Woodward, Inc. Price, Consensus and EPS Surprise | Woodward, Inc. Quote
The bottom line was also affected by increased investment in research and development along with the timing of stock compensation expenses.
Total Revenues
Quarterly net sales of $470.1 million surpassed the Zacks Consensus Estimate of $469 million by 0.4%. The top line also increased 6.2% from the year-ago figure of $442.9 million on sales growth at the Aerospace segment.
Operational Update
Woodward’s total costs and expenses increased 9.3% year over year to $432.7 million in the reported quarter. The rise was led by higher cost of goods sold; selling, general, and administrative expenses as well as research and development expenses.
Quarterly Segmental Performance
Aerospace: Revenues were up 14.7% year over year to $305.9 million, owing to increased sales at commercial as well as defense programs.
Earnings totaled $43.6 million, down 7.1% year over year owing to increased investment in research and development for new awards and opportunities being pursued.
Industrial: Revenues totaled $164.2 million, down 6.8% year over year due to significant drop in both large gas turbine and renewable sales.
Meanwhile, the bottom line improved 7.5% to $19.3 million on cost reduction initiatives, partially offset by the impact of lower sales.
Financial Details
As of Dec 31, 2017, cash and cash equivalents were $85.7 million, compared with $87.6 million as of Sep 30, 2017.
Long-term debt (excluding current portion) totaled $583.3 million as of Dec 31, 2017, up from $580.3 million as of Sep 30, 2017.
Free cash outflow was $31 million in the fiscal first quarter compared with $31 million in the year-ago quarter.
In the fiscal first quarter, net cash used in operating activities was $2.5 million, compared with $52.4 million in the prior-year quarter. Also, payments for property, plant and equipment were $28.5 million, compared with $21.1 million a year ago.
Fiscal 2018 Guidance
Woodward maintains net sales guidance at the $2.2-$2.3 billion range for fiscal 2018. Earnings per share are now projected in the band of $3.35-$3.60, compared to the prior range of $3.20-$3.50, reflecting the anticipated effects of the change in tax legislation.
Zacks Rank
Woodward has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Peer Releases
Watts Water Technologies WTS posted a positive earnings surprise of 2.56% in the previous quarter. The company is expected to report quarterly results on Feb 12.
Nanometrics NANO recorded a positive earnings surprise of 4.76% last quarter. The company is likely to release quarterly results on Feb 6.
Allied Motion Technologies AMOT delivered a positive earnings surprise of 22.22% in the preceding quarter. The company is expected to report quarterly results on Mar 12.
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