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
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).
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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.
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
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 >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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