Yahoo Finance Woodward (WWD) Q2 Earnings & Revenues Top Estimates, Rise Y/Y
Woodward, Inc. WWD reported adjusted net earnings per share (EPS) of $1.62 for second-quarter fiscal 2024, which beat the Zacks Consensus Estimate by 26.6%. In the year-ago quarter, WWD reported adjusted net EPS of $1.01.
Quarterly net sales increased 16% year over year to $835 million. Continued momentum in end-market demand and improved operational performance resulted in this uptick. The top line beat the consensus estimate by 4.1%.
The company has increased its 2024 guidance owing to expected improved operational performance in the second half of fiscal 2024 coupled with visibility into the fiscal third-quarter demand for the China on-highway natural gas truck business.
Woodward, Inc. Price, Consensus and EPS Surprise
Woodward, Inc. price-consensus-eps-surprise-chart | Woodward, Inc. Quote
Net sales are now expected to be in the $3.25-$3.35 billion band compared with the previous guidance of $3.15-$3.3 billion. The Zacks Consensus Estimate is pegged at $3.23 billion.
Adjusted free cash flow is projected to be between $325 million and $375 million (previous projection: in the range of $300-$350 million).
EPS is expected to be between $5.70 and $6.00. Earlier, EPS was forecasted in the range of $5.00-$5.40. The Zacks Consensus Estimate is pegged at $5.27.
Aerospace segment revenues are anticipated to increase in the range of 12%-14% compared with the previous guided range of 10%-14%. Industrial segment revenues are expected to increase in the range of 13%-15% compared with the prior guided range of 8%-10%.
Post this announcement, the stock gained 5.9% in the after-market trading hours on Apr 29. In the past year, shares of WWD have gained 54.3% compared with the sub-industry’s growth of 24.1%.
Image Source: Zacks Investment Research
Segment Results
Aerospace: Net sales were $498 million, up 14% year over year. The upside can be attributed to higher commercial OEM and commercial aftermarket sales resulting from higher OEM production rates, improving passenger traffic and fleet utilization.
Defense OEM sales also improved due to higher ground vehicles. Defense aftermarket sales benefited from supply-chain stabilization and higher output. We predicted the metric to be $489.9 million.
Segmental earnings were $98 million, up from $73 million a year ago. Higher volume and net price realization resulted in an uptick.
Industrial: Net sales totaled $338 million, up 20% year over year due to growth in transportation, especially in the on-highway natural gas truck business in China, coupled with solid sales in power generation and price realization. Also, solid demand for alternative fuels across the marine industry is a tailwind. We expected the metric to be $294.7 million.
Demand for natural gas heavy-duty trucks in China was solid. Sales for on-highway natural gas trucks in China were $65 million in the quarter under review. However, management expects sales in the fiscal third quarter to be between $35 million to $40 million.
Segmental earnings were $65 million, up from $38 million in the year-ago quarter. This was mainly due to increased demand for on-highway natural gas trucks in China and operational improvements (like higher output and other efficiency gains).
Other Details
Gross margin was up 600 basis points year over year to 22.1%.
Total costs and expenses increased to $714.7 million, up 5.4% year over year. Adjusted EBITDA was $117 million compared with $164 million a year ago.
Cash Flow & Liquidity
As of Mar 31, 2024, Woodward had $316.9 million in cash and cash equivalents with $649 million of long-term debt (less the current portion).
For the first half of fiscal 2024, WWD generated $144 million of net cash from operating activities, increasing from $40 million in the prior-year period.
Adjusted free cash flow was $90 million. It recorded an adjusted free cash outflow of $1 million in the prior-year quarter. The uptick was mainly due to increased earnings partly offset by higher capital expenditures.
Woodward did not repurchase any shares in the quarter under review.
During the first half of fiscal 2024, the company paid dividends worth $28 million. Recently, it declared a dividend of 25 cents per share. This dividend will be paid on Jun 5, 2024, to shareholders as of May 22.
Zacks Rank and Stocks to Consider
Woodward currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader technology space are Badger Meter BMI, Pinterest PINS and Arista Networks ANET. Each stock presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Badger Meter’s 2024 EPS has increased 9.9% in the past 60 days to $3.89. BMI’s long-term earnings growth rate is 12.3%.
Badger Meter’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, delivering an average surprise of 12.7%. BMI shares have risen 35.8% in the past year.
The Zacks Consensus Estimate for PINS’s 2024 EPS has increased 0.7% in the past 60 days to $1.34. PINS’s long-term earnings growth rate is 20.1%.
Pinterest’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, delivering an average earnings surprise of 37.4%. Shares of PINS have gained 13% in the past year.
The Zacks Consensus Estimate for ANET’s 2024 EPS has increased 0.4% in the past 60 days to $7.49. ANET’s long-term earnings growth rate is 17.5%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in each of the last four quarters, delivering an average earnings surprise of 13.3%. Shares of ANET have gained 62.7% in the past year.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Badger Meter, Inc. (BMI) : Free Stock Analysis Report
Woodward, Inc. (WWD) : Free Stock Analysis Report
Arista Networks, Inc. (ANET) : Free Stock Analysis Report
Pinterest, Inc. (PINS) : Free Stock Analysis Report
