Woodward (WWD) Q3 Earnings Skip Estimates, Revenues Up Y/Y

Woodward, Inc. WWD reported respectable 3rd-quarter fiscal 2021 final results with internet earnings and gross sales escalating on a 12 months-above-12 months foundation. The increase was driven by bettering market place circumstances, energy throughout the aerospace phase ensuing from recovering passenger site visitors and helpful doing work funds administration along with reliable protection unique devices maker (OEM), industrial OEM and aftermarket revenue.

Nonetheless, both the bottom line and top rated line lagged their respective Zacks Consensus Estimate. Despite the world wide financial upswing, macroeconomic uncertainties, weak industrial segment profits, regional market volatility and supply chain disruptions stemming from the pandemic go on to hamper Woodward’s small business.

Net Income

On a GAAP basis, net earnings in the quarter were $48.9 million or 74 cents for every share compared with $38.5 million or 61 cents for each share in the year-back quarter. The calendar year-over-calendar year enhancement in earnings was primarily driven by leading-line growth.

Modified internet earnings came in at $48.9 million or 74 cents for each share as opposed with $30.7 million or 48 cents for every share in the yr-earlier quarter. The bottom line skipped the Zacks Consensus Estimate by 25 cents.

Woodward, Inc. Selling price, Consensus and EPS Surprise

Woodward, Inc. Price, Consensus and EPS Surprise

Woodward, Inc. Cost, Consensus and EPS Surprise

Woodward, Inc. cost-consensus-eps-surprise-chart | Woodward, Inc. Estimate


Web product sales in the fiscal 3rd quarter jumped 6.3% calendar year in excess of 12 months to $556.7 million thanks to better gross sales in the Aerospace phase. On the other hand, it was negatively impacted by nearly $30 million on account of delayed orders and worldwide supply chain disruptions, mostly hampering the aerospace enterprise. Aside from COVID hardships, regional market volatility acted as a significant headwind.

Business OEM and aftermarket revenue enhanced on a year-more than-yr foundation, thanks to rising aircraft construct premiums and recovering domestic passenger traffic. Defense OEM product sales had been up 5% 12 months about year on the back again of strong order quantity and backlog. However, the business expects guided weapons volume to significantly drop in fiscal 2022. With corporations choosing up tempo despite the lingering COVID-19 impact, things such as increasing crude charges and demand from customers for electricity have boosted the global oil and fuel marketplaces, thus accelerating investments. The best line lagged the consensus estimate of $623 million.

Section Final results

Aerospace: Net revenue ended up up 11.2% year above 12 months to $340.9 million led by better commercial OEM and aftermarket profits ensuing from strengthening passenger targeted traffic. Favorable protection paying out alongside with plane utilization and enhance programs aided the segment’s quarterly outcomes amid the world wide turmoil.

Optimistic indicators these as Boeing 737 MAX’s assistance recovery across vital markets and gradual increase in plane manufacturing charges are expected to improve the segment’s revenues in the future quarters. The segment’s earnings were being $53.2 million, up from $41.1 million in the 12 months-ago quarter pushed by larger sales quantity in industrial OEM.

Industrial: Web gross sales totaled $215.8 million, down .7% 12 months above calendar year thanks to the effect of world-wide provide chain constraints stemming from the pandemic accompanied by weak spot in China natural fuel engines. The China V diesel truck pre-get dampened normal gas engine revenue. Excluding the divestiture of renewable ability techniques and similar organizations, favorable fx improved the segment’s profitability.

Investments are anticipated to increase with gradual advancement in worldwide oil demand from customers and growing costs. Encouraged by robust demand from customers for fuel turbine and backup electric power for details centers, marine market witnessed improved ship utilization. This, in turn, propelled aftermarket exercise. The segment’s earnings were $27.2 million, down from $27.4 million in the year-in the past quarter.

Other Details

Total costs and costs elevated to $498 million from $478.8 million a yr back. Adjusted EBITDA arrived in at $99 million in contrast with $83.7 million in the year-in the past quarter.

Hard cash Flow & Liquidity

For the 1st nine months of fiscal 2021, Woodward created $317.9 million of web funds from running functions in comparison with $212.4 million a year back. Free cash flow for the similar interval arrived in at $296.6 million when compared with $173.3 million in the prior-calendar year period, driven by lessen capital expenses and efficient operating funds administration. As of Jun 30, 2021, the company had $362 million in funds and income equivalents with $739.1 million of long-phrase personal debt (a lot less present portion).

Outlook Withheld

Because of to deficiency of visibility amid economic disruptions stemming from the coronavirus-induced turmoil, together with offer chain worries and regional industry fluctuations, Woodward refrained from supplying any assistance for fiscal 2021. Nevertheless, the company expects sales, earnings and cost-free hard cash circulation effects for the fourth quarter to be higher than the 3rd quarter supported by a resilient small business design and balanced harmony sheet posture. Woodward continues to be concentrated on leveraging its operational framework and optimized doing the job funds to faucet on growth prospects and return to pre-COVID funds allocation tactic to enrich lengthy-term shareholder value.

Zacks Rank & Stocks to Look at

Woodward at this time has a Zacks Rank #3 (Keep).

Some greater-ranked shares in the broader field are Transcat, Inc. TRNS, SeaChange International, Inc. SEAC and Knowles Corporation KN, every carrying a Zacks Rank #2 (Obtain). You can see the entire checklist of today’s Zacks #1 Rank (Solid Obtain) stocks listed here.

Transcat shipped a trailing 4-quarter earnings surprise of 49.9%, on regular.

SeaChange Intercontinental shipped a trailing 4-quarter earnings surprise of 12.2%, on typical.

Knowles sent a trailing four-quarter earnings surprise of 10.8%, on common.

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