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Woodward's Q3 Earnings & Revenues Surpass Estimates, Up Y/Y
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Key Takeaways
WWD's consolidated Q3 sales rose 8% to $915M, led by Aerospace but offset by Industrial segment decline.
Aerospace sales rose 15.2% to $596M, driven by smart defense and commercial after-market strength.
WWD raised 2025 EPS guidance to $6.50-$6.75 and sales to $3.45B-$3.525B on continued demand momentum.
Woodward, Inc. (WWD - Free Report) reported third-quarter fiscal 2025 adjusted net earnings per share (EPS) of $1.76, which increased 8% year over year. The figure beat the Zacks Consensus Estimate by 8.6%.
Quarterly net sales grew 8% year over year to $915 million and surpassed the consensus estimate by 3.1%. This growth was driven by strong performance in the Aerospace segment and the Core Industrial business.
The company’s strong year-to-date performance reinforces confidence in both its mid-term and long-term growth outlook as it continues to enhance its ability to meet sustained demand across the end markets. Given this momentum, improved macroeconomic visibility and expected continued growth, the company raised its full-year sales and earnings guidance.
However, the company narrowed its free cash flow range. The reduction was due to increased working capital needs to support higher sales amid a dynamic supply chain and production environment.
After the result announcement, the stock lost around 2% in the pre-market trading session today. In the past six months, shares of WWD have gained 39% compared with the Zacks Aerospace - Defense Equipment industry’s growth of 20.9%.
Image Source: Zacks Investment Research
WWD’s Segment Results
Aerospace: Net sales were $596 million, up 15.2% year over year. We predicted the metric to be $571 million. Aerospace growth was fueled by robust performance in smart defense and commercial services, partially offset by softer results in commercial OEM and defense services.
Defense OEM sales increased 55.7% in the quarter to $150 million, driven by strong demand for smart defense programs. Commercial after-market sales grew 30%, driven by both pricing and higher volumes, supported by the continued high utilization of legacy aircraft.
Commercial OEM sales declined 7.6% year over year to $175 million as airframers dealt with supply chain disruptions and customers actively managed their inventory levels. Defense after-market sales were down 16.2%.
Segmental earnings were $126 million, up 23.5% year over year. The earnings growth was primarily driven by price realization and higher volumes, partially offset by inflationary pressure, strategic investments in manufacturing and an unfavorable product mix.
Industrial: Net sales totaled $319 million, down 3.2% year over year. We expected the metric to be $304.4 million.
Within the Industrial segment, Transportation sales declined 12%. In the third quarter, China on-highway sales were down $36 million from a year ago.
Core industrial sales, which exclude China on-highway business, were up 9%, driven by a 16% increase in Oil & Gas, a 16% increase in Marine Transportation, and Power Generation remained flat.
Segmental earnings were $48 million, falling from $60 million in the year-ago quarter. Industrial earnings were affected by lower China on-highway volumes and inflationary pressures, which were partly offset by price realization.
WWD’s Margin Performance
Gross margin was up 10 basis points year over year to 27.2%.
Total costs and expenses were $788.6 million, up 8.7% year over year. Adjusted EBITDA was $165.9 million compared with $160.7 million a year ago.
WWD’s Cash Flow & Liquidity
As of June 30, 2025, Woodward had $473.2 million in cash and cash equivalents with $503.9 million of long-term debt (less the current portion).
For the quarter ended June 30, 2025, WWD generated $126 million of net cash from operating activities compared with $153 million reported in the prior-year period.
Free cash flow was $99 million compared with $137 million in the year-ago quarter. The decline was mainly due to higher working capital requirements.
In the quarter under review, WWD returned $62 million to its shareholders in the form of $17 million of dividends and $45 million worth of share repurchases.
In the first nine months of 2025, total returns to stockholders reached $172 million, including $124 million in share repurchases and $48 million in dividends.
WWD’s Fiscal 2025 Guidance
Woodward raised its sales and earnings guidance, lowering its adjusted effective tax rate and narrowing its free cash flow range.
For fiscal 2025, the company now expects consolidated sales to range between $3450 million and $3525 million compared with the prior guidance of $3,375 million and $3,500 million. Adjusted EPS is now expected to be between $6.50 and $6.75 compared with the previous guidance of $5.95 to $6.25.
Aerospace segment revenues are anticipated to increase in the range of 11% to 13% compared with 8-13% predicted earlier, and a decline in Industrial sales of 5% to 7% compared to the prior guidance of a decrease of 7-9%.
The company anticipates Aerospace segment margins to be between 21% and 21.5%, and Industrial margins to be approximately 14.5%.
Woodward expects the adjusted effective tax rate for 2025 to be around 17% from prior guidance of 19%. Free cash flow is now projected to be between $315 million and $350 million compared to the previous guidance of $350 million to $400 million.
Recent Performance of Other Companies in Aerospace
Teledyne Technologies Inc. (TDY - Free Report) reported second-quarter 2025 adjusted earnings of $5.20 per share, which surpassed the Zacks Consensus Estimate of $5.02 by 3.6%. The bottom line also improved 13.5% from $4.58 recorded in the year-ago quarter.
Total sales were $1.51 billion, which beat the Zacks Consensus Estimate of $1.47 billion by 2.8%. The top line also surged 10.2% from $1.37 billion reported in the year-ago quarter. In the past, shares of TDY have gained 31.4%.
Moog (MOG.A - Free Report) came out with quarterly earnings of $2.37 per share, beating the Zacks Consensus Estimate of $2.1 per share. This compares to earnings of $1.91 per share a year ago.
Moog posted revenues of $971.36 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 6.45%. This compares to year-ago revenues of $904.73 million.
In the past, shares of Moog have declined 3.9%
Hexcel Corporation (HXL - Free Report) reported second-quarter 2025 adjusted earnings of 50 cents per share, which declined 16.7% from the year-ago quarter’s figure of 60 cents. However, the bottom line surpassed the Zacks Consensus Estimate of 46 cents by 8.7%.
The company’s net sales totaled $489.9 million, which beat the Zacks Consensus Estimate of $471 million by 4%. However, the top line fell 2.1% from the year-ago quarter’s reported sales of $500.4 million.
Shares of HXL have lost 5.6% in the past year.
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Woodward's Q3 Earnings & Revenues Surpass Estimates, Up Y/Y
Key Takeaways
Woodward, Inc. (WWD - Free Report) reported third-quarter fiscal 2025 adjusted net earnings per share (EPS) of $1.76, which increased 8% year over year. The figure beat the Zacks Consensus Estimate by 8.6%.
Quarterly net sales grew 8% year over year to $915 million and surpassed the consensus estimate by 3.1%. This growth was driven by strong performance in the Aerospace segment and the Core Industrial business.
The company’s strong year-to-date performance reinforces confidence in both its mid-term and long-term growth outlook as it continues to enhance its ability to meet sustained demand across the end markets. Given this momentum, improved macroeconomic visibility and expected continued growth, the company raised its full-year sales and earnings guidance.
However, the company narrowed its free cash flow range. The reduction was due to increased working capital needs to support higher sales amid a dynamic supply chain and production environment.
After the result announcement, the stock lost around 2% in the pre-market trading session today. In the past six months, shares of WWD have gained 39% compared with the Zacks Aerospace - Defense Equipment industry’s growth of 20.9%.
Image Source: Zacks Investment Research
WWD’s Segment Results
Aerospace: Net sales were $596 million, up 15.2% year over year. We predicted the metric to be $571 million. Aerospace growth was fueled by robust performance in smart defense and commercial services, partially offset by softer results in commercial OEM and defense services.
Defense OEM sales increased 55.7% in the quarter to $150 million, driven by strong demand for smart defense programs. Commercial after-market sales grew 30%, driven by both pricing and higher volumes, supported by the continued high utilization of legacy aircraft.
Commercial OEM sales declined 7.6% year over year to $175 million as airframers dealt with supply chain disruptions and customers actively managed their inventory levels. Defense after-market sales were down 16.2%.
Segmental earnings were $126 million, up 23.5% year over year. The earnings growth was primarily driven by price realization and higher volumes, partially offset by inflationary pressure, strategic investments in manufacturing and an unfavorable product mix.
Industrial: Net sales totaled $319 million, down 3.2% year over year. We expected the metric to be $304.4 million.
Within the Industrial segment, Transportation sales declined 12%. In the third quarter, China on-highway sales were down $36 million from a year ago.
Core industrial sales, which exclude China on-highway business, were up 9%, driven by a 16% increase in Oil & Gas, a 16% increase in Marine Transportation, and Power Generation remained flat.
Segmental earnings were $48 million, falling from $60 million in the year-ago quarter. Industrial earnings were affected by lower China on-highway volumes and inflationary pressures, which were partly offset by price realization.
WWD’s Margin Performance
Gross margin was up 10 basis points year over year to 27.2%.
Total costs and expenses were $788.6 million, up 8.7% year over year. Adjusted EBITDA was $165.9 million compared with $160.7 million a year ago.
WWD’s Cash Flow & Liquidity
As of June 30, 2025, Woodward had $473.2 million in cash and cash equivalents with $503.9 million of long-term debt (less the current portion).
For the quarter ended June 30, 2025, WWD generated $126 million of net cash from operating activities compared with $153 million reported in the prior-year period.
Free cash flow was $99 million compared with $137 million in the year-ago quarter. The decline was mainly due to higher working capital requirements.
Woodward, Inc. Price, Consensus and EPS Surprise
Woodward, Inc. price-consensus-eps-surprise-chart | Woodward, Inc. Quote
In the quarter under review, WWD returned $62 million to its shareholders in the form of $17 million of dividends and $45 million worth of share repurchases.
In the first nine months of 2025, total returns to stockholders reached $172 million, including $124 million in share repurchases and $48 million in dividends.
WWD’s Fiscal 2025 Guidance
Woodward raised its sales and earnings guidance, lowering its adjusted effective tax rate and narrowing its free cash flow range.
For fiscal 2025, the company now expects consolidated sales to range between $3450 million and $3525 million compared with the prior guidance of $3,375 million and $3,500 million. Adjusted EPS is now expected to be between $6.50 and $6.75 compared with the previous guidance of $5.95 to $6.25.
Aerospace segment revenues are anticipated to increase in the range of 11% to 13% compared with 8-13% predicted earlier, and a decline in Industrial sales of 5% to 7% compared to the prior guidance of a decrease of 7-9%.
The company anticipates Aerospace segment margins to be between 21% and 21.5%, and Industrial margins to be approximately 14.5%.
Woodward expects the adjusted effective tax rate for 2025 to be around 17% from prior guidance of 19%. Free cash flow is now projected to be between $315 million and $350 million compared to the previous guidance of $350 million to $400 million.
WWD’s Zacks Rank
Woodward currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Performance of Other Companies in Aerospace
Teledyne Technologies Inc. (TDY - Free Report) reported second-quarter 2025 adjusted earnings of $5.20 per share, which surpassed the Zacks Consensus Estimate of $5.02 by 3.6%. The bottom line also improved 13.5% from $4.58 recorded in the year-ago quarter.
Total sales were $1.51 billion, which beat the Zacks Consensus Estimate of $1.47 billion by 2.8%. The top line also surged 10.2% from $1.37 billion reported in the year-ago quarter.
In the past, shares of TDY have gained 31.4%.
Moog (MOG.A - Free Report) came out with quarterly earnings of $2.37 per share, beating the Zacks Consensus Estimate of $2.1 per share. This compares to earnings of $1.91 per share a year ago.
Moog posted revenues of $971.36 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 6.45%. This compares to year-ago revenues of $904.73 million.
In the past, shares of Moog have declined 3.9%
Hexcel Corporation (HXL - Free Report) reported second-quarter 2025 adjusted earnings of 50 cents per share, which declined 16.7% from the year-ago quarter’s figure of 60 cents. However, the bottom line surpassed the Zacks Consensus Estimate of 46 cents by 8.7%.
The company’s net sales totaled $489.9 million, which beat the Zacks Consensus Estimate of $471 million by 4%. However, the top line fell 2.1% from the year-ago quarter’s reported sales of $500.4 million.
Shares of HXL have lost 5.6% in the past year.