On July 29, 2024, Woodward Inc (WWD, Financial) released its 8-K filing detailing the financial results for the third quarter of fiscal year 2024. Woodward Inc is an independent designer, manufacturer, and service provider of control solutions for the aerospace and industrial markets. The company designs, produces, and services reliable, efficient, low-emission, and high-performance energy control products for diverse applications in challenging environments.
Performance Overview
Woodward Inc (WWD, Financial) reported net sales of $848 million for Q3 FY2024, a 6% increase from $801 million in the same period last year. However, this figure fell slightly short of the analyst estimate of $853.52 million. Net earnings for the quarter were $102 million, or $1.63 per share, surpassing the analyst estimate of $1.46 per share and significantly higher than the $85 million, or $1.37 per share, reported in Q3 FY2023.
Segment Performance
The Aerospace segment saw net sales of $518 million, an 8% increase from $481 million in the same period last year. This growth was driven by a 19% increase in commercial aftermarket sales and a 22% increase in defense aftermarket sales. Segment earnings were $102 million, or 19.7% of segment net sales, compared to $83 million, or 17.3% of segment net sales, in Q3 FY2023.
The Industrial segment reported net sales of $330 million, a 3% increase from $320 million in the same period last year. Segment earnings were $60 million, or 18.1% of segment net sales, compared to $58 million, or 18.1% of segment net sales, in Q3 FY2023.
Financial Achievements
Woodward Inc (WWD, Financial) achieved significant financial milestones in Q3 FY2024. Net cash provided by operating activities for the first nine months of 2024 was $297 million, compared to $156 million in the same period last year. Free cash flow for the first nine months of 2024 was $225 million, compared to $98 million in the same period last year. Adjusted free cash flow was $230 million, compared to $103 million in the same period last year.
We delivered a solid quarter, driven by robust end-market demand and the dedicated efforts of all our members,” stated Chip Blankenship, Chairman and Chief Executive Officer. “In Aerospace, increased utilization drove strong aftermarket demand in the third quarter. Total Industrial growth moderated as expected. Industrial benefitted from increased sales in power generation as well as transportation despite flat China on-highway shipments year-over-year. In this dynamic market, we remain focused on growth, operational excellence, and innovation, which continue to position Woodward to deliver sustained long-term shareholder value."
Income Statement Highlights
| Metric | Q3 FY2024 | Q3 FY2023 |
|---|---|---|
| Net Sales | $848 million | $801 million |
| Net Earnings | $102 million | $85 million |
| Earnings Per Share (EPS) | $1.63 | $1.37 |
Balance Sheet and Cash Flow
As of June 30, 2024, Woodward Inc (WWD, Financial) reported total assets of $4.32 billion, compared to $4.01 billion as of September 30, 2023. Total liabilities were $2.16 billion, compared to $1.94 billion as of September 30, 2023. The company returned $348 million to stockholders in the form of $43 million of dividends and $305 million of share repurchases during the first nine months of 2024.
Analysis and Outlook
Woodward Inc (WWD, Financial) demonstrated strong performance in Q3 FY2024, with earnings per share surpassing analyst estimates. The Aerospace segment's robust aftermarket sales and the Industrial segment's steady growth contributed to the company's overall success. However, the slight miss in revenue compared to analyst estimates indicates potential challenges in meeting market expectations.
Looking ahead, Woodward Inc (WWD, Financial) has revised its full-year guidance, with adjusted EPS now expected to be between $5.80 and $6.00, up from the previous range of $5.70 to $6.00. The company remains focused on growth, operational excellence, and innovation to deliver sustained long-term shareholder value.
Explore the complete 8-K earnings release (here) from Woodward Inc for further details.
