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Woodward (WWD) Q2 Earnings Lag Estimates, Revenues Up Y/Y
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Woodward, Inc. (WWD - Free Report) reported tepid second-quarter fiscal 2022 results. Adjusted net earnings came in at 72 cents per share, declining 30.8% year over year. The bottom line missed the Zacks Consensus Estimate by 16.3%.
Net sales in the fiscal second quarter moved up 1% year over year to $587 million due to higher sales in the Aerospace segment. Despite recovery across most of its end markets, nearly $100 million in sales were hampered due to ongoing industry-wide COVID-19-related disruptions. The top line lagged the consensus estimate by 2.2%.
Segment Results
Aerospace: Net sales were $373 million, up 2% year over year. The upside can be attributed to higher commercial OEM (up 21% year over year) and aftermarket sales (up 40%) resulting from improving passenger traffic and aircraft utilization along with higher OEM production rates. Higher utilization of the commercial fleet aided the segment’s quarterly results. Continued softness in defense aftermarket sales and guided weapons due to supply chain disruptions were headwinds.
The segment’s earnings were $60 million, down from $69 million in the year-ago quarter. The downside was caused by net inflationary pressures, including higher manufacturing and labor costs.
Industrial: Net sales totaled $214 million compared with $217 million in the prior-year quarter. The decline was due to the negative impact of unfavorable foreign exchange and weakness in China’s natural gas engines. However, it was mitigated by higher marine sales and increased utilization of the in-service fleet.
The segment’s earnings were $17 million, down from $28 million in the year-ago quarter mainly due to net inflationary impacts.
Other Details
Total costs and expenses increased to $532.7 million, up 5.9% year over year. Adjusted EBITDA came in at $90.8 million compared with $118.9 million in the year-ago quarter.
Cash Flow & Liquidity
As of Mar 31, 2022, Woodward had $208.4 million in cash and cash equivalents with $728.2 million of long-term debt (less the current portion).
For the six months ended, Woodward generated $50 million of net cash from operating activities compared with $219 million a year ago. Free cash flow for the same period came in at $26 million compared with $206 million in the prior-year period. The downtick was mainly due to increased working capital to support the anticipated growth in 2022.
Woodward repurchased shares worth $245 million in the quarter under review. In January 2022, the company authorized a new $800-million, two-year stock repurchase program, reinforcing its financial position and positive outlook.
Guidance Lowered
For fiscal 2022, net sales are now expected to be between $2.4 billion and $2.55 billion compared with the earlier guidance of $2.45-$2.65 billion.
While the Aerospace segment revenues are likely to increase low double digits to mid-teens, the Industrial segment revenues are expected to increase between 5% and 10%.
Adjusted free cash flow is projected to be between $200 million and $230 million. Adjusted earnings are likely to be in the range of $3.20-$3.60 per share compared with the earlier projection of $3.55 to $3.95.
The Zacks Consensus Estimate for Flex’s fiscal 2022 earnings is pegged at $1.88 per share, unchanged in the past 60 days. The long-term earnings growth rate is pegged at 14.9%.
Flex earnings beat the Zacks Consensus Estimate all last four quarters, with the average being 25.6%. Shares of FLEX have declined 2.4% in the past year.
The Zacks Consensus Estimate for Jabil fiscal 2022 earnings is pegged at $7.25 per share, up 10.2% in the past 60 days. The long-term earnings growth rate is 12%.
Jabil earnings beat the Zacks Consensus Estimate all last four quarters, with the average being 13.5%. Shares of JBL have gained 11.8% in the past year.
The Zacks Consensus Estimate for Broadcom’s fiscal 2022 earnings is pegged at $35.67 per share, up 3.8% in the past 60 days. AVGO’s long-term earnings growth rate is pegged at 14.5%.
Broadcom’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, with the average being 1.9%. Shares of AVGO have increased 29.6% in the past year.
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Woodward (WWD) Q2 Earnings Lag Estimates, Revenues Up Y/Y
Woodward, Inc. (WWD - Free Report) reported tepid second-quarter fiscal 2022 results. Adjusted net earnings came in at 72 cents per share, declining 30.8% year over year. The bottom line missed the Zacks Consensus Estimate by 16.3%.
Net sales in the fiscal second quarter moved up 1% year over year to $587 million due to higher sales in the Aerospace segment. Despite recovery across most of its end markets, nearly $100 million in sales were hampered due to ongoing industry-wide COVID-19-related disruptions. The top line lagged the consensus estimate by 2.2%.
Segment Results
Aerospace: Net sales were $373 million, up 2% year over year. The upside can be attributed to higher commercial OEM (up 21% year over year) and aftermarket sales (up 40%) resulting from improving passenger traffic and aircraft utilization along with higher OEM production rates. Higher utilization of the commercial fleet aided the segment’s quarterly results. Continued softness in defense aftermarket sales and guided weapons due to supply chain disruptions were headwinds.
Woodward, Inc. Price, Consensus and EPS Surprise
Woodward, Inc. price-consensus-eps-surprise-chart | Woodward, Inc. Quote
The segment’s earnings were $60 million, down from $69 million in the year-ago quarter. The downside was caused by net inflationary pressures, including higher manufacturing and labor costs.
Industrial: Net sales totaled $214 million compared with $217 million in the prior-year quarter. The decline was due to the negative impact of unfavorable foreign exchange and weakness in China’s natural gas engines. However, it was mitigated by higher marine sales and increased utilization of the in-service fleet.
The segment’s earnings were $17 million, down from $28 million in the year-ago quarter mainly due to net inflationary impacts.
Other Details
Total costs and expenses increased to $532.7 million, up 5.9% year over year. Adjusted EBITDA came in at $90.8 million compared with $118.9 million in the year-ago quarter.
Cash Flow & Liquidity
As of Mar 31, 2022, Woodward had $208.4 million in cash and cash equivalents with $728.2 million of long-term debt (less the current portion).
For the six months ended, Woodward generated $50 million of net cash from operating activities compared with $219 million a year ago. Free cash flow for the same period came in at $26 million compared with $206 million in the prior-year period. The downtick was mainly due to increased working capital to support the anticipated growth in 2022.
Woodward repurchased shares worth $245 million in the quarter under review. In January 2022, the company authorized a new $800-million, two-year stock repurchase program, reinforcing its financial position and positive outlook.
Guidance Lowered
For fiscal 2022, net sales are now expected to be between $2.4 billion and $2.55 billion compared with the earlier guidance of $2.45-$2.65 billion.
While the Aerospace segment revenues are likely to increase low double digits to mid-teens, the Industrial segment revenues are expected to increase between 5% and 10%.
Adjusted free cash flow is projected to be between $200 million and $230 million. Adjusted earnings are likely to be in the range of $3.20-$3.60 per share compared with the earlier projection of $3.55 to $3.95.
Zacks Rank & Stocks to Consider
Woodward currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader technology sector are Flex (FLEX - Free Report) , Jabil (JBL - Free Report) and Broadcom (AVGO - Free Report) . Jabil sports a Zacks Rank #1 (Strong Buy), while Flex and Broadcom carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Flex’s fiscal 2022 earnings is pegged at $1.88 per share, unchanged in the past 60 days. The long-term earnings growth rate is pegged at 14.9%.
Flex earnings beat the Zacks Consensus Estimate all last four quarters, with the average being 25.6%. Shares of FLEX have declined 2.4% in the past year.
The Zacks Consensus Estimate for Jabil fiscal 2022 earnings is pegged at $7.25 per share, up 10.2% in the past 60 days. The long-term earnings growth rate is 12%.
Jabil earnings beat the Zacks Consensus Estimate all last four quarters, with the average being 13.5%. Shares of JBL have gained 11.8% in the past year.
The Zacks Consensus Estimate for Broadcom’s fiscal 2022 earnings is pegged at $35.67 per share, up 3.8% in the past 60 days. AVGO’s long-term earnings growth rate is pegged at 14.5%.
Broadcom’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, with the average being 1.9%. Shares of AVGO have increased 29.6% in the past year.