Yahoo Finance Woodward Inc (WWD) Q2 2024 Earnings Call Transcript Highlights: Strong Performance and ...
Net Sales: $835 million, up 16% year-over-year.
Earnings Per Share (EPS): $1.56, adjusted EPS $1.62.
Aerospace Segment Sales: $498 million, up 14%.
Industrial Segment Sales: $338 million, up 20%.
Free Cash Flow: $88 million for the first half of fiscal 2024.
Capital Expenditures: $56 million for the first half of fiscal 2024.
Effective Tax Rate: 19.1% for the second quarter of 2024.
Net Cash from Operating Activities: $144 million for the first half of fiscal 2024.
Leverage: 1.2x EBITDA at the end of the second quarter.
Dividends: $28 million returned to stockholders in the first half of fiscal 2024.
Fiscal 2024 Guidance: Net sales expected to be between $3.25 billion and $3.35 billion.
Release Date: April 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Your increased guidance on the Aerospace side going from 10% to 14%, now 12% to 14%, what is that attributable to? Is it OE aftermarket? And could you address where you currently sit in terms of MAX rates and MAX rates and 787 rates? A: Charles P. Blankenship, CEO & Chairman of Woodward, Inc., explained that the guidance adjustment is based on tighter visibility for the remainder of the year, with both OEM and aftermarket performing well. Regarding MAX and 787 rates, he noted that Woodward is closely aligned with customer signals and has not seen strong indications to reduce rates in the next quarter. Adjustments might be seen in the fourth quarter, but this is incorporated in their guidance.
Q: Can you say what the price realizations were this quarter and how that splits between the segments? A: William F. Lacey, Executive VP & CFO of Woodward, Inc., mentioned that price realization was just below 8% at the company level, with each segment contributing fairly to this outcome.
Q: It looks like you ended the quarter with about $317 million of cash on the balance sheet, and you didn't buy back any stock this quarter. Does this reflect a change in your capital allocation priorities? A: Charles P. Blankenship clarified that there is no change in capital allocation priorities. The situation reflects timing and other decisions, and there is a raised priority on buybacks to offset dilution and return cash to shareholders.
Q: Often when a new CEO comes in, a new CFO, you implement a lean program or some other kind of operating system. It can take a while to bear fruit. You've had very good results so far. How is that taking place? A: Charles P. Blankenship discussed Woodward's ongoing lean journey, emphasizing the challenge of acclimating new team members. He highlighted the potential for significant productivity improvements over the next 2-3 years.
Q: On the Industrial guidance revision, can you parse out how much of that was China truck versus non-China truck? A: William F. Lacey indicated that the guidance revision for the Industrial segment reflects both the performance in the first half and expectations for the China on-highway business, which is anticipated to remain consistent.
Q: Was there anything in the Aerospace -- a great performance. So anything sort of, I'll say, onetime nature there? Just trying to sort of square what you did in the second quarter with sort of the guide for the rest of the year. A: William F. Lacey explained that the Aerospace segment's performance benefited from good service sales and mix but emphasized that the guidance for the rest of the year remains solid, factoring in potential supply chain and OEM demand challenges.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
