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WWD Q2 EPS jumped 34% to $2.27, beating estimates as sales rose 23% to $1.09B.
Woodward saw strong Aerospace and Industrial demand, driving growth across OEM and services markets.
WWD raised FY26 outlook, now sees sales up 2023% and EPS of $9.15$9.45 on solid momentum.
Woodward, Inc. (WWD - Free Report) reported second-quarter fiscal 2026 adjusted net earnings per share (EPS) of $2.27, which jumped 34.3% year over year and beat the Zacks Consensus Estimate by 13.5%.
Quarterly net sales increased 23.4% year over year to $1090.6 million. The upside was fueled by market tailwinds across Aerospace and Industrial. The top line beat the consensus estimate by 9.9%.
Management highlighted that it is raising its full-year outlook, supported by strong first-half performance and continued demand strength. The company remains focused on disciplined execution in a dynamic environment, while continuing to invest in innovation and operational excellence to drive sustained profitable growth and long-term shareholder value.
Aerospace: Net sales were $703 million, up 25% year over year, driven by broad-based strength across commercial services, commercial OEM and defense OEM. Defense OEM and defense services sales were up 9% and 8%, respectively, year over year. Commercial OEM sales were up 30% year over year, while services jumped 36%.
Segmental earnings were $158 million, up from $125 million a year ago. The increase was driven by price realization and higher sales volumes, partially offset by the impact of inflation as well as continued investments in manufacturing capabilities, research and development and the enterprise resource planning system upgrade. Margins expanded 30 basis points (bps) to 22.5%.
Industrial: Net sales totaled $387 million, up 20% year over year, driven by gains across transportation, power generation and oil & gas markets. Core industrial sales, excluding the China on-highway impact, rose 19%.
Transportation sales surged 34%, and oil and gas sales increased 18%. Power generation grew a modest 7%.
Segmental earnings were $66 million, up from $46 million in the year-ago quarter. In the industrial segment, margins increased 270 bps to 17%. The increase was driven by higher sales volumes, effective price realization and a favorable product mix, partially offset by inflationary pressures and a reserve related to a product performance claim.
Other Details of WWD
Gross margin was up 180 bps year over year to 29%.
Total costs and expenses were $923.1 million, up 23% year over year.
Adjusted EBITDA was $215.5 million compared with $164 million a year ago.
WWD’s Cash Flow & Liquidity
As of March 31, 2026, Woodward had $501.2 million in cash and cash equivalents with $453.4 million of long-term debt (less the current portion).
For the quarter ended March 31, 2026, WWD generated $90.8 million of net cash from operating activities compared with $77.8 million reported in the same period last year. For the first half, WWD generated $205.3 million of net cash from operating activities compared with $112.3 million reported a year ago.
For the second quarter, free cash flow was $38.2 million compared with $59.4 million in the year-ago period. This uptick was driven by higher earnings.
Capital expenditures reached $53 million in the second quarter, up from $18 million. The company expects capital spending to rise meaningfully over the remaining two quarters.
In the quarter under review, WWD returned $245 million to its shareholders in the form of $19 million of dividends and $226 million worth of share repurchases.
WWD’s Fiscal 2026 Guidance
For fiscal 2026, Woodward has raised its overall outlook, reflecting strong performance and improved visibility. The company now expects total sales to grow 20–23%, an increase from the earlier guidance of 14–18%.
At the segment level, Aerospace sales growth is now anticipated at 21–24%, up from the earlier estimated 15–20% range, with segment earnings expected to improve to 23–23.5% of sales compared with 22–23% previously. In the Industrial segment, sales are projected to grow 18–20%, an increase from the prior outlook of 11–14%, while segment earnings are expected to rise to 18–18.5% of sales from the earlier 16–17% range.
The company anticipates adjusted EPS of $9.15–$9.45 versus the prior range of $8.20–$8.60.
Other assumptions remain unchanged — the company still anticipates free cash flow of $300–$350 million, capital expenditures of around $290 million and an adjusted effective tax rate of approximately 22%.
Teledyne Technologies Inc. (TDY - Free Report) reported first-quarter 2026 adjusted earnings of $5.80 per share, which surpassed the Zacks Consensus Estimate of $5.48 by 5.9%. The bottom line also improved 17.2% from $4.95 recorded in the year-ago quarter. Including one-time items, the company recorded GAAP earnings of $4.85 per share, up 21.6% from the prior-year period’s earnings of $3.99. The year-over-year improvement in the bottom line can be attributed to higher net sales and operating income in the first quarter than the year-ago quarter’s reported actuals.
Hexcel Corporation (HXL - Free Report) reported first-quarter 2026 adjusted earnings of 59 cents per share, which improved 59.5% from the year-ago quarter’s figure of 37 cents. The bottom line also surpassed the Zacks Consensus Estimate of 42 cents by 40.5%.
The company reported GAAP earnings of 49 cents per share, which surpassed the year-ago quarter’s earnings of 35 cents.
The company’s net sales totaled $501.5 million, which beat the Zacks Consensus Estimate of $487 million by 3%. The top line also witnessed an improvement of 9.9% from the year-ago quarter’s figure of $456.5 million.
RTX Corporation’s (RTX - Free Report) first-quarter 2026 adjusted earnings per share of $1.78 beat the Zacks Consensus Estimate of $1.52 by 17%. The bottom line improved 21.1% from the year-ago quarter’s level of $1.47.
Quarterly revenues came in at $22.08 billion, up 8.7% from $20.31 billion in the year-ago period. Sales also beat the consensus mark of $21.56 billion by 2.43%.
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Woodward's Q2 Earnings & Revenues Beat Estimates, Increase Y/Y
Key Takeaways
Woodward, Inc. (WWD - Free Report) reported second-quarter fiscal 2026 adjusted net earnings per share (EPS) of $2.27, which jumped 34.3% year over year and beat the Zacks Consensus Estimate by 13.5%.
Quarterly net sales increased 23.4% year over year to $1090.6 million. The upside was fueled by market tailwinds across Aerospace and Industrial. The top line beat the consensus estimate by 9.9%.
Management highlighted that it is raising its full-year outlook, supported by strong first-half performance and continued demand strength. The company remains focused on disciplined execution in a dynamic environment, while continuing to invest in innovation and operational excellence to drive sustained profitable growth and long-term shareholder value.
In the past year, shares have gained 90.3% compared with the Zacks Aerospace - Defense Equipment industry’s rise of 23.6%.
Image Source: Zacks Investment Research
WWD’s Segment Results
Aerospace: Net sales were $703 million, up 25% year over year, driven by broad-based strength across commercial services, commercial OEM and defense OEM. Defense OEM and defense services sales were up 9% and 8%, respectively, year over year. Commercial OEM sales were up 30% year over year, while services jumped 36%.
Segmental earnings were $158 million, up from $125 million a year ago. The increase was driven by price realization and higher sales volumes, partially offset by the impact of inflation as well as continued investments in manufacturing capabilities, research and development and the enterprise resource planning system upgrade. Margins expanded 30 basis points (bps) to 22.5%.
Industrial: Net sales totaled $387 million, up 20% year over year, driven by gains across transportation, power generation and oil & gas markets. Core industrial sales, excluding the China on-highway impact, rose 19%.
Transportation sales surged 34%, and oil and gas sales increased 18%. Power generation grew a modest 7%.
Segmental earnings were $66 million, up from $46 million in the year-ago quarter. In the industrial segment, margins increased 270 bps to 17%. The increase was driven by higher sales volumes, effective price realization and a favorable product mix, partially offset by inflationary pressures and a reserve related to a product performance claim.
Other Details of WWD
Gross margin was up 180 bps year over year to 29%.
Total costs and expenses were $923.1 million, up 23% year over year.
Adjusted EBITDA was $215.5 million compared with $164 million a year ago.
WWD’s Cash Flow & Liquidity
As of March 31, 2026, Woodward had $501.2 million in cash and cash equivalents with $453.4 million of long-term debt (less the current portion).
For the quarter ended March 31, 2026, WWD generated $90.8 million of net cash from operating activities compared with $77.8 million reported in the same period last year. For the first half, WWD generated $205.3 million of net cash from operating activities compared with $112.3 million reported a year ago.
For the second quarter, free cash flow was $38.2 million compared with $59.4 million in the year-ago period. This uptick was driven by higher earnings.
Woodward, Inc. Price, Consensus and EPS Surprise
Woodward, Inc. price-consensus-eps-surprise-chart | Woodward, Inc. Quote
Capital expenditures reached $53 million in the second quarter, up from $18 million. The company expects capital spending to rise meaningfully over the remaining two quarters.
In the quarter under review, WWD returned $245 million to its shareholders in the form of $19 million of dividends and $226 million worth of share repurchases.
WWD’s Fiscal 2026 Guidance
For fiscal 2026, Woodward has raised its overall outlook, reflecting strong performance and improved visibility. The company now expects total sales to grow 20–23%, an increase from the earlier guidance of 14–18%.
At the segment level, Aerospace sales growth is now anticipated at 21–24%, up from the earlier estimated 15–20% range, with segment earnings expected to improve to 23–23.5% of sales compared with 22–23% previously. In the Industrial segment, sales are projected to grow 18–20%, an increase from the prior outlook of 11–14%, while segment earnings are expected to rise to 18–18.5% of sales from the earlier 16–17% range.
The company anticipates adjusted EPS of $9.15–$9.45 versus the prior range of $8.20–$8.60.
Other assumptions remain unchanged — the company still anticipates free cash flow of $300–$350 million, capital expenditures of around $290 million and an adjusted effective tax rate of approximately 22%.
WWD’s Zacks Rank
Woodward currently carries a Zacks Rank #3(Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Performance of Other Companies
Teledyne Technologies Inc. (TDY - Free Report) reported first-quarter 2026 adjusted earnings of $5.80 per share, which surpassed the Zacks Consensus Estimate of $5.48 by 5.9%. The bottom line also improved 17.2% from $4.95 recorded in the year-ago quarter.
Including one-time items, the company recorded GAAP earnings of $4.85 per share, up 21.6% from the prior-year period’s earnings of $3.99.
The year-over-year improvement in the bottom line can be attributed to higher net sales and operating income in the first quarter than the year-ago quarter’s reported actuals.
Hexcel Corporation (HXL - Free Report) reported first-quarter 2026 adjusted earnings of 59 cents per share, which improved 59.5% from the year-ago quarter’s figure of 37 cents. The bottom line also surpassed the Zacks Consensus Estimate of 42 cents by 40.5%.
The company reported GAAP earnings of 49 cents per share, which surpassed the year-ago quarter’s earnings of 35 cents.
The company’s net sales totaled $501.5 million, which beat the Zacks Consensus Estimate of $487 million by 3%. The top line also witnessed an improvement of 9.9% from the year-ago quarter’s figure of $456.5 million.
RTX Corporation’s (RTX - Free Report) first-quarter 2026 adjusted earnings per share of $1.78 beat the Zacks Consensus Estimate of $1.52 by 17%. The bottom line improved 21.1% from the year-ago quarter’s level of $1.47.
Quarterly revenues came in at $22.08 billion, up 8.7% from $20.31 billion in the year-ago period. Sales also beat the consensus mark of $21.56 billion by 2.43%.