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Woodward (WWD) Tops Earnings, Lags Sales Estimates in Q1

Woodward, Inc.WWD reported first-quarter fiscal 2017 earnings of 73 cents per share, beating the Zacks Consensus Estimate of 50 cents by 46%. Earnings also surged 82.5% from the prior-year figure of 40 cents. This upside was primarily driven by the after-tax special charges totaling 16 cents per share, which were included in the prior-year quarter as well.

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Total Revenue

The company's quarterly net sales of $442.9 million missed the Zacks Consensus Estimate of $453.1 million by 2.3%. Revenues were almost flat compared to the year-ago figure of $445.1 million, mainly on account of flat year-over-year sales witnessed in both the Aerospace and Industrial segments.

Operational Update

Woodward's total costs and expenses dropped 5.1% year over year to $395.8 million in the reported quarter. Costs declined primarily due to lower cost of goods sold, selling, general, and administrative expenses as well as research and development (R&D) costs.

Quarterly Segmental Performance

Aerospace: Segment revenues were down 0.7% year over year to $267 million, primarily driven by lower commercial aftermarket sales.

Earnings came in at $47 million, up 9.3% on the back of lower R&D expenses.

Industrial: Segment revenues totaled $176 million, almost flat year over year owing to signs of stabilization in after-market sales as well as flat OEM sales.

Nevertheless, earnings tanked 22.2% to $18 million primarily due to unfavorable product mix.

Woodward, Inc. Price, Consensus and EPS Surprise

Woodward, Inc. Price, Consensus and EPS Surprise | Woodward, Inc. Quote

Financial Condition

Woodward's cash and cash equivalents as of Dec 31, 2016 were $80.9 million, compared with $81.1 million as of Sep 30, 2016.

Long-term debt (excluding current portion) was $569.9 million as of Dec 31, 2016, down from $577.2 million as of Sep 30, 2016.

Free cash inflow was $31.3 million in the fiscal first quarter, compared with 4.2 million in the year-ago quarter.

In the reported quarter, net cash generated from operating activities was $52.4 million, compared with $37.4 million in the prior-year quarter.

Payments for property, plant and equipment were $21.1 million, compared with $33.1 million in the year-ago quarter.

Fiscal 2017 Guidance

Net sales growth projection is maintained in the 4−6% range. The company also continues to expect earnings in the band of $2.95-$3.25 per share.

Price Movement

Woodward's stock gained about 12.6% in the last three months, outperforming the Zacks categorized Instruments-Control industry's 11.3%. This is probably because the company is in the process to become a major supplier of aircraft, gas turbines and heavy duty engines. Woodward has also been witnessing strong backlog in the commercial aerospace space.

Upcoming Peer Releases

Nanometrics Incorporated NANO is scheduled to release its quarterly numbers on Feb 7. The Zacks Consensus Estimate is pegged at 26 cents.

Badger Meter, Inc. BMI is expected to release its quarterly numbers on Feb 6. The Zacks Consensus Estimate stands at 23 cents.

Allied Motion Technologies Inc. AMOT is slated to release its quarterly numbers on Mar 8. The Zacks Consensus Estimate is pegged at 23 cents.

Zacks Rank

Woodward currently has a Zacks Rank #3 (Hold).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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