A month has passed by because the final earnings report for Woodward (WWD). Shares have misplaced about 8.8% in that time-frame, underperforming the S&P 500.
Will the latest unfavourable development proceed main as much as its subsequent earnings launch, or is Woodward due for a breakout? Earlier than we dive into how buyers and analysts have reacted as of late, let’s take a fast take a look at the latest earnings report in an effort to get a greater deal with on the vital catalysts.
Woodward’s This autumn Earnings Beat Estimates
Woodward reported fourth-quarter fiscal 2024 adjusted internet earnings per share (EPS) of $1.41, up 6% yr over yr and beating the Zacks Consensus Estimate by 15.6%.
Quarterly internet gross sales elevated 10% yr over yr to $855 million. Robust operational execution, together with continued momentum in end-market demand, led to this uptick. The highest line beat the consensus estimate by 5.9%.
For the total yr, the corporate reported internet gross sales of $3.3 billion, rising 14% yr over yr and adjusted EPS surged 45% to $6.11.
Section Outcomes
Aerospace: Web gross sales have been $553 million, up 22% yr over yr pushed by broad-based power. Protection OEM and protection aftermarket gross sales have been up 40% and seven%, respectively, yr over yr. Industrial OEM gross sales have been up 16% attributable to strong demand amid supply-chain challenges. Industrial aftermarket gross sales elevated 22% attributed to robust passenger visitors and better plane utilization. We predicted the metric to be $511 million.
Segmental earnings have been $106 million, up from $78 million a yr in the past. The rise in section earnings was a results of value realization and robust quantity development partly offset by inflation.
Industrial: Web gross sales totaled $302 million, down 6% yr over yr. A 19% decline in transportation gross sales offset income development from energy era (up 4%) and oil and gasoline (up 12%). We anticipated the metric to be $295.3 million.
The transportation section was extensively affected by weak spot in China’s on-highway pure gasoline vehicles enterprise. The enterprise was impacted by low ranges of manufacturing stemming from native financial troubles. Revenues have been $22 million within the quarter beneath overview. Nonetheless, administration expects additional decline within the fiscal first quarter, with gross sales to be round $5 million.
Segmental earnings have been $38 million, down from $54 million within the year-ago quarter. Industrial earnings have been affected by decrease quantity and an unfavorable combine, which was partly offset by value realization.
Different Particulars
Gross margin was down 10 foundation factors yr over yr to 24.3%.
Complete prices and bills have been $752.9 million, up 11% yr over yr. Adjusted EBITDA was $147 million in contrast with $139 million a yr in the past.
Money Move & Liquidity
As of Sept. 30, 2024, Woodward had $282.3 million in money and money equivalents with $569.8 million of long-term debt (much less the present portion).
For the fiscal yr ended Sept. 30, 2024, the generated $439 million of internet money from working actions, rising from $309 million reported within the prior-year interval.
Adjusted free money stream was $348 million in contrast with $238 million in fiscal 2024. This rise in adjusted free money stream was primarily attributable to elevated earnings and improved working capital, partially offset by larger capital expenditures.
Throughout fiscal 2024, the corporate returned $449 million to its shareholders within the type of $58 million of dividends and $391 million of share repurchases. Within the fourth quarter, it paid $15 million in dividends and $86 million towards share repurchases.
Steerage
Pushed by a robust demand setting and bettering operational execution, it expects fiscal 2025 gross sales to be between $3.3 billion and $3.5 billion. Aerospace section revenues are anticipated to extend within the vary of 6-13%.
Administration expects revenues from China on-highway pure gasoline vehicles to be $40 million for the yr, indicating a big decline of $175 million from fiscal 2024. Consequently, Industrial section revenues are anticipated to say no within the band of 7-11%.
Adjusted free money stream is anticipated to be between $350 million and $400 million whereas EPS is predicted to be between $5.75 and $6.25.
How Have Estimates Been Transferring Since Then?
Up to now month, buyers have witnessed a downward development in estimates revision.
The consensus estimate has shifted -8.57% attributable to these adjustments.
VGM Scores
At present, Woodward has a fantastic Progress Rating of A, although it’s lagging so much on the Momentum Rating entrance with a D. Charting a considerably comparable path, the inventory was allotted a grade of C on the worth aspect, placing it within the center 20% for this funding technique.
General, the inventory has an mixture VGM Rating of B. Should you aren’t centered on one technique, this rating is the one you have to be concerned with.
Outlook
Estimates have been broadly trending downward for the inventory, and the magnitude of those revisions signifies a downward shift. Notably, Woodward has a Zacks Rank #3 (Maintain). We count on an in-line return from the inventory within the subsequent few months.
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Woodward, Inc. (WWD) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the writer and don’t essentially replicate these of Nasdaq, Inc.
