Woodward (WWD) Q3 Earnings & Revenues Beat, Increase Y/Y
Woodward, Inc WWD reported net earnings of $1.37 per share for third-quarter fiscal 2023, which beat the Zacks Consensus Estimate by 41.2%. In the year-ago quarter, WWD reported adjusted net earnings of 64 cents.
Net sales in the fiscal third quarter moved up 30% year over year to $801 million. Higher sales in the Aerospace and Industrial segments resulted in this uptick. The top line beat the consensus estimate by 14%.
Due to continued strength in end market demand, the company has raised full year guidance. For fiscal 2023, net sales are now expected in the $2.85-$2.9 billion band compared with the earlier guided range of $2.7-$2.8 billion.
Woodward, Inc. Price and EPS Surprise
Woodward, Inc. price-eps-surprise | Woodward, Inc. Quote
Post this announcement, the stock surged 14.2% in the after-market trading hours on Jul 31. In the past year, shares of WWD have gained 34% compared with sub-industry’s growth of 25.1%.
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Segment Results
Aerospace: Net sales were $481 million, up 19.6% year over year. The upside can be attributed to higher commercial OEM (up 41% year over year) and commercial aftermarket sales (up 28% year over year), resulting from improving passenger traffic and fleet utilization. Defense OEM sales were soft owing to due to lower guided weapons sales.
The segment’s earnings were $83 million, up from $57 million in the year-ago quarter. Price realization, higher commercial OEM and aftermarket sales resulted in the uptick. However, it was partly offset by higher annual incentive compensation.
Industrial: Net sales totaled $320 million, up 50.6% from the prior-year quarter due to higher demand across all markets.
The segment’s earnings were $58 million, up from $21 million in the year-earlier quarter, mainly due to price realization, higher volume and favorable product mix partly offset by higher annual incentive compensation.
Other Details
Total costs and expenses increased to $694.9 million, up 23.2% year over year. Adjusted EBITDA was $147.4 million compared with $88.4 million in the year-ago quarter.
Cash Flow & Liquidity
As of Jun 30, Woodward had $114.1 million in cash and cash equivalents with $651.4 million of long-term debt (less the current portion).
For the nine months of fiscal 2023, Woodward generated $156 million of net cash from operating activities, rising from $86 million in the comparable period in fiscal 2022. For the nine months of fiscal 2023, adjusted free cash flow was $103 million, improving from $52 million in the comparable period in fiscal 2022. The uptick was mainly due increased earnings.
Woodward repurchased shares worth $26 million in the nine months ended Jun 30. In January 2022, WWD authorized a new $800 million two-year stock repurchase program, reinforcing its financial position and positive outlook. The company has $328 million remaining under its share repurchase authorization.
Fiscal 2023 Outlook
Aerospace revenues are now anticipated to increase between 16% and 18%, while Industrial revenues are expected to climb in the 28-30% band. Earlier both the segments’ revenues were anticipated to rise between 14% and 19%.
Adjusted free cash flow is projected to be between $200 million and $250 million. Earnings are estimated in the range of $4.05-$4.25 per share (previous outlook: $3.50-$3.75 per share).
Woodward currently has a Zacks Rank #2 (Buy).
Other Key Picks
Some other top-ranked stocks worth consideration in the broader technology space are Badger Meter BMI, Salesforce CRM and Adobe ADBE. Badger Meter sports a Zacks Rank #1 (Strong Buy) while each of Salesforce and Adobe carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Badger Meter’s 2023 earnings has increased 4.8% in the past 60 days to $2.82 per share. BMI’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average surprise being 6.7%. %. Shares of BMI have risen 71.6% in the past year.
The consensus mark for Salesforce’s fiscal 2024 earnings is pegged at $7.44 per share, up 0.6% in the past 60 days. The long-term earnings growth rate is anticipated to be 19.3%.
CRM’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average surprise being 15.5%. Shares of CRM have grown 22.4% in the past year.
The consensus estimate for Adobe’s fiscal 2023 earnings is pegged at $15.70 per share, up 1.8% in the past 60 days. The long-term earnings growth rate is anticipated to be 13.3%.
Adobe’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average beat being 3.1%. Shares of ADBE have improved 33.2% in the past year.
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