Woodward (WWD) Q2 2025 earnings summary

Executive summary

• Q2 2025 net sales increased 6% year-over-year to $884M, with adjusted EPS up 4% to $1.69 and reported EPS at $1.78, reflecting strong Aerospace growth and resilience despite Industrial headwinds, particularly in China.

• Aerospace segment growth was driven by robust defense OEM demand (up 52–53%) and commercial aftermarket sales (up 23%), while commercial OEM declined 9% and defense aftermarket fell 8%.

• Industrial segment performance was mixed, with core sales up 11% but overall sales down 5% due to China on-highway weakness; power generation, oil & gas, and marine saw double-digit growth.

• Free cash flow for H1 2025 was $60M, down from $88M, due to higher working capital.

• The company raised the low end of FY25 sales guidance to $3,375M–$3,500M and adjusted EPS to $5.95–$6.25, reflecting confidence in continued growth.

Financial highlights

• Q2 2025 net sales: $884M, up 6% year-over-year; adjusted net earnings: $103M, up 3%; reported net earnings: $109M, up 12%.

• Adjusted EPS: $1.69 (up from $1.62); reported EPS: $1.78 (up from $1.56).

• Free cash flow for H1 2025: $60M, down from $88M year-over-year.

• Aerospace segment sales: $562M (+13%); Industrial segment sales: $322M (–5%).

• Gross margin for Q2 2025 was 27.2%, down 90 bps year-over-year.

Outlook and guidance

• FY25 consolidated sales guidance raised to $3,375M–$3,500M; adjusted EPS guidance raised to $5.95–$6.25.

• Aerospace sales expected to grow 8–13%; Industrial sales to decline 7–9%.

• Guidance assumes no further tariff escalation or global recession; $10–$15M tariff impact included.

• Commercial aftermarket growth expected to moderate to high single digits in H2; defense OE to remain strong.

• Management expects cash flow from operations and available credit to fund ongoing needs.