Woodward (WWD) Q3 2024 earnings summary

Executive summary

• Q3 FY24 net sales increased 6% year-over-year to $848 million, with EPS rising to $1.63 from $1.37 and net earnings up 20% to $102 million, driven by strong aftermarket demand in Aerospace and growth in Industrial power generation and transportation.

• Nine-month net sales reached $2.47 billion, up from $2.14 billion, and net earnings were $290 million ($4.65 per share), up from $150 million ($2.44 per share).

• Operating earnings and margins improved, supported by price realization, innovation in advanced fuel systems, and a strong balance sheet.

• Year-to-date adjusted free cash flow reached $230 million, with leverage at 1.5x EBITDA.

• $348 million returned to shareholders year-to-date through $43 million in dividends and $305 million in share repurchases.

Financial highlights

• Q3 FY24 net sales were $848 million, up 6% from $801 million in Q3 FY23; net earnings rose 21% to $103 million; EPS increased 19% to $1.63.

• Gross margin improved to 27.1% from 25.5% year-over-year; EBITDA for Q3 FY24 was $161 million, up from $147 million.

• Free cash flow for the first nine months was $225 million, up from $98 million; adjusted free cash flow was $230 million.

• Aerospace segment earnings rose to $102 million (19.7% margin), up from $83 million (17.3%); commercial aftermarket sales up 19%, defense aftermarket up 22%.

• Industrial segment earnings were $60 million (18.1% margin), relatively flat year-over-year; power generation sales up 8%, transportation up 3%, oil & gas down 6%.

Outlook and guidance

• FY24 net sales guidance narrowed to $3,250–$3,300 million; adjusted EPS guidance raised to $5.80–$6.00; adjusted free cash flow expected at $300–$350 million.

• Aerospace sales growth forecast at 12–14%, with segment earnings margin at 18–19%; Industrial sales growth at 11–13%, with ~17.5% margin.

• Adjusted effective tax rate revised to ~18.5%; capital expenditures projected at $100 million.

• Guidance reflects low Q4 China on-highway natural gas truck shipments and ongoing aerospace supply chain challenges.

• Inflation and economic uncertainty remain key factors being monitored.