Woodward (WWD) Q3 2024 earnings summary

Executive summary

• Q3 FY24 net sales rose 6% year-over-year to $848 million, driven by strong aerospace aftermarket and robust end market demand, with net earnings up 20% to $102 million ($1.63 per share).

• 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).

• Aerospace aftermarket sales surged 19% year-over-year, while industrial growth was led by power generation and transportation, offset by a 6% decline in oil and gas and flat China On-Highway sales.

• Operating earnings and margins improved, supported by price realization and operational excellence.

• Management continues to monitor inflation, supply chain challenges, and China On-Highway market volatility.

Financial highlights

• Q3 FY24 net sales: $848 million, up 6% year-over-year; net earnings: $102 million (up 20%); EPS: $1.63 (up from $1.37).

• 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.

• Returned $348 million to shareholders in nine months via $43 million in dividends and $305 million in share repurchases.

• Leverage at 1.5x EBITDA; total debt at $923 million; cash and equivalents at $308 million at quarter-end.

Outlook and guidance

• FY24 net sales guidance narrowed to $3,250–$3,300 million; adjusted EPS guidance raised to $5.80–$6.00.

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

• Adjusted free cash flow guidance set at $300–$350 million; adjusted effective tax rate revised to ~18.5%.

• 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.