Woodward (WWD) Q1 2025 earnings summary

Executive summary

• Q1 FY25 began strongly, with robust demand and operational improvements, though net sales declined 1.8%–2% year-over-year to $772.7M–$773M, mainly due to lower China on-highway and Boeing work stoppage, partially offset by Aerospace and core Industrial growth.

• Aerospace segment delivered 7% sales growth and margin expansion, while Industrial segment declined due to China truck market weakness.

• Strategic actions included the acquisition of Safran's electromechanical actuation business and divestitures in the Industrial segment.

• Lean transformation, automation, and innovation initiatives are driving productivity and operational excellence.

• Q1 results met expectations, supporting confidence in full-year guidance.

Financial highlights

• Net sales for Q1 FY25 were $772.7M–$773M, down 1.8%–2% year-over-year; net earnings were $87M–$87.1M; adjusted net earnings were $82.6M–$83M.

• Adjusted EPS was $1.35 (down 7%–8%); reported EPS was $1.42.

• Free cash flow was $0.9M–$1M, down from $5M in the prior year.

• Gross margin declined to 24.5%, down 150 bps year-over-year.

• EBITDA was $141M; adjusted EBITDA was $134.9M–$135M.

Outlook and guidance

• FY25 sales guidance reaffirmed at $3.3B–$3.5B; adjusted EPS narrowed to $5.85–$6.25.

• Adjusted effective tax rate now expected at ~19%.

• Aerospace segment margin expected at 20%–21%; Industrial at 13%–14%.

• Free cash flow guidance unchanged at $350M–$400M; capex ~$115M.

• Commercial aftermarket growth expected to moderate after strong Q1; defense OEM remains a key growth driver.