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Woodward (WWD) Q3 Earnings Top Estimates, Revenues Lag
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Woodward, Inc. (WWD) reported third-quarter fiscal 2016 earnings of 81 cents per share, beating the Zacks Consensus Estimate of 76 cents by 6.6%. Earnings also increased 22.7% from the prior-year figure of 66 cents. Continued weakness in the Industrial segment was offset by a strong performance at Aerospace and a lower tax rate in the quarter.
The company’s quarterly net sales of $507.7 million missed the Zacks Consensus Estimate of $523 million by 2.9%. Revenues, however, were up 2.6% from the year-ago figure of $494.8 million mainly on the back of higher contribution from the Aerospace segment.
Operational Update
Woodward’s total cost and expenses increased 1.6% year over year to $444.3 million in the reported quarter. Costs were up primarily due to higher cost of goods sold and an increase in interest expense.
Quarterly Segmental Performance
Aerospace: Segment revenues were up 7% year over year to $308.6 million driven by higher defense sales, including both OEM and Aftermarket, and solid commercial and regional OEM sales.
Earnings came in at $57.7 million, up 24.4%,on the back of higher sales volumes and strong aftermarket activity.
Industrial: Segment revenues were $199.1 million, down 3.5% year over year owing to the persistent market weakness and sluggish growth in China which led to end-user reluctance to invest in large capital projects. These headwinds were, however, partially offset by strength in wind converters and aftermarket sales.
Earnings declined 28.1% to $22 million primarily due to lower sales volumes and product mix.
Woodward’s cash and cash equivalents as of Jun 30, 2016 were $118.1 million, compared with $82.2 million as of Sep 30, 2015.
Long-term debt (excluding current portion) was $685 million as of Jun 30, 2016, down from $850 million as of Sep 30, 2015.
Free cash inflow was $31 million in the third quarter of fiscal 2016, compared with an outflow of 19 million in the year-ago period.
In the third quarter of fiscal 2016, net cash generated from operating activities was $362.5 million, compared with $171.5 million in the prior-year quarter.
Payments for property, plant and equipment in the third quarter of fiscal 2016 were $128.6 million, compared with $190.9 million in the year-ago period.
Fiscal 2016 Guidance
Net sales are expected to be $2 billion. The company reaffirmed its earnings expectations in the range of $2.75–$2.95 per share.
Upcoming Peer Releases
Roper Technologies, Inc. (ROP - Free Report) is scheduled to release its second-quarter earnings on Jul 25. The Zacks Consensus Estimate stands at $1.61.
Nanometrics Incorporated is scheduled to release its second-quarter earnings on Jul 26. The Zacks Consensus Estimate is 25 cents.
Watts Water Technologies, Inc. (WTS - Free Report) is expected to release its second-quarter earnings on Aug 4. The Zacks Consensus Estimate stands at 71 cents.
Zacks Rank
Woodward Inc. currently carries a Zacks Rank #4 (Sell).
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Woodward (WWD) Q3 Earnings Top Estimates, Revenues Lag
Woodward, Inc. (WWD) reported third-quarter fiscal 2016 earnings of 81 cents per share, beating the Zacks Consensus Estimate of 76 cents by 6.6%. Earnings also increased 22.7% from the prior-year figure of 66 cents. Continued weakness in the Industrial segment was offset by a strong performance at Aerospace and a lower tax rate in the quarter.
Total Revenue
The company’s quarterly net sales of $507.7 million missed the Zacks Consensus Estimate of $523 million by 2.9%. Revenues, however, were up 2.6% from the year-ago figure of $494.8 million mainly on the back of higher contribution from the Aerospace segment.
Operational Update
Woodward’s total cost and expenses increased 1.6% year over year to $444.3 million in the reported quarter. Costs were up primarily due to higher cost of goods sold and an increase in interest expense.
Quarterly Segmental Performance
Aerospace: Segment revenues were up 7% year over year to $308.6 million driven by higher defense sales, including both OEM and Aftermarket, and solid commercial and regional OEM sales.
Earnings came in at $57.7 million, up 24.4%,on the back of higher sales volumes and strong aftermarket activity.
Industrial: Segment revenues were $199.1 million, down 3.5% year over year owing to the persistent market weakness and sluggish growth in China which led to end-user reluctance to invest in large capital projects. These headwinds were, however, partially offset by strength in wind converters and aftermarket sales.
Earnings declined 28.1% to $22 million primarily due to lower sales volumes and product mix.
WOODWARD INC Price and Consensus
WOODWARD INC Price and Consensus | WOODWARD INC Quote
Financial Condition
Woodward’s cash and cash equivalents as of Jun 30, 2016 were $118.1 million, compared with $82.2 million as of Sep 30, 2015.
Long-term debt (excluding current portion) was $685 million as of Jun 30, 2016, down from $850 million as of Sep 30, 2015.
Free cash inflow was $31 million in the third quarter of fiscal 2016, compared with an outflow of 19 million in the year-ago period.
In the third quarter of fiscal 2016, net cash generated from operating activities was $362.5 million, compared with $171.5 million in the prior-year quarter.
Payments for property, plant and equipment in the third quarter of fiscal 2016 were $128.6 million, compared with $190.9 million in the year-ago period.
Fiscal 2016 Guidance
Net sales are expected to be $2 billion. The company reaffirmed its earnings expectations in the range of $2.75–$2.95 per share.
Upcoming Peer Releases
Roper Technologies, Inc. (ROP - Free Report) is scheduled to release its second-quarter earnings on Jul 25. The Zacks Consensus Estimate stands at $1.61.
Nanometrics Incorporated is scheduled to release its second-quarter earnings on Jul 26. The Zacks Consensus Estimate is 25 cents.
Watts Water Technologies, Inc. (WTS - Free Report) is expected to release its second-quarter earnings on Aug 4. The Zacks Consensus Estimate stands at 71 cents.
Zacks Rank
Woodward Inc. currently carries a Zacks Rank #4 (Sell).
Want the latest recommendations from Zacks Investment Research? Today, you can download7 Best Stocks for the Next 30 Days. Click to get this free report >>