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Woodward, Inc (WWD - Free Report) reported adjusted net earnings of $1.33 per share for fourth-quarter fiscal 2023, which beat the Zacks Consensus Estimate by 4.7%. In the year-ago quarter, WWD reported adjusted net earnings of 84 cents.
Quarterly net sales moved up 21% year over year to $777 million. Higher sales in the Aerospace and Industrial segments resulted in this uptick. The top line beat the consensus estimate by 2%.
Post this announcement, the stock was down 2.1% in the after-market trading hours on Nov 16. In the past year, shares of WWD have gained 36.2% compared with sub-industry’s growth of 15.6%.
Image Source: Zacks Investment Research
Segment Results
Aerospace: Net sales were $455 million, up 11% year over year. The upside can be attributed to higher commercial OEM and commercial aftermarket sales resulting from improving passenger traffic and fleet utilization. Defense OEM sales were soft owing to lower guided weapons sales. We predicted the metric to be $452.2 million.
Segmental earnings were $78 million, up from $63 million a year ago. Price realization, higher commercial OEM and aftermarket sales resulted in the uptick. However, it was partly offset by inflation and higher annual incentive compensation.
Industrial: Net sales totaled $322 million, up 39% from the prior-year quarter due to higher volumes across all markets. We expected the metric to be $284.4 million.
Segmental earnings were $54 million, up from $21 million in the year-earlier quarter, mainly due to price realization, higher volume and favorable product mix. This was partly offset by inflation and higher annual incentive compensation.
Other Details
Gross margin was up 320 basis points year over year to 24.4%.
Total costs and expenses increased to $679 million, up 16.6% year over year. Adjusted EBITDA was $138.9 million compared with $92.9 million a year ago.
Cash Flow & Liquidity
As of Sep 30, Woodward had $137.5 million in cash and cash equivalents with $645.7 million of long-term debt (less the current portion).
For fiscal 2023, Woodward generated $309 million of net cash from operating activities, rising from $194 million in fiscal 2022. Adjusted free cash flow was $238 million, improving from $144 million in fiscal 2022. The uptick was mainly due to increased earnings.
Woodward repurchased shares worth $126 million in fiscal 2023. In January 2022, WWD authorized a new $800 million two-year stock repurchase program, reinforcing its financial position and positive outlook. The company has $228 million remaining under its share repurchase authorization.
Fiscal 2024 Outlook
Net sales are now expected in the $3.1-$3.25 billion band. The Zacks Consensus Estimate for revenues is pegged at $3.06 billion.
Free cash flow is projected to be between $275 million and $325 million.
Earnings are suggested to be between $4.70 per share and $5.15 per share. The Zacks Consensus Estimate is pegged at $4.59 per share.
Aerospace and Industrial revenues are anticipated to increase 10-14% and 4-6%, respectively.
The Zacks Consensus Estimate for Adobe’s fiscal 2023 EPS has increased by 0.3% in the past 60 days to $15.93. ADBE’s long-term earnings growth rate is 13.5%.
Adobe’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 3.3%. Shares of ADBE have climbed 82% in the past year.
The Zacks Consensus Estimate for Synopsys’ fiscal 2023 EPS has remained flat in the past 60 days at $11.09. SNPS’ long-term earnings growth rate is 16.7%. Shares of SNPS have gained 62.6% in the past year.
The Zacks Consensus Estimate for Cadence’s 2023 EPS has improved 0.4% in the past 60 days to $5.11.
Cadence’s earnings outpaced the Zacks Consensus Estimate in each of the last four quarters, the average earnings surprise being 4.1%. Shares of CDNS have jumped 61.8% in the past year.
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Woodward (WWD) Q4 Earnings & Revenues Beat, Increase Y/Y
Woodward, Inc (WWD - Free Report) reported adjusted net earnings of $1.33 per share for fourth-quarter fiscal 2023, which beat the Zacks Consensus Estimate by 4.7%. In the year-ago quarter, WWD reported adjusted net earnings of 84 cents.
Quarterly net sales moved up 21% year over year to $777 million. Higher sales in the Aerospace and Industrial segments resulted in this uptick. The top line beat the consensus estimate by 2%.
Post this announcement, the stock was down 2.1% in the after-market trading hours on Nov 16. In the past year, shares of WWD have gained 36.2% compared with sub-industry’s growth of 15.6%.
Image Source: Zacks Investment Research
Segment Results
Aerospace: Net sales were $455 million, up 11% year over year. The upside can be attributed to higher commercial OEM and commercial aftermarket sales resulting from improving passenger traffic and fleet utilization. Defense OEM sales were soft owing to lower guided weapons sales. We predicted the metric to be $452.2 million.
Segmental earnings were $78 million, up from $63 million a year ago. Price realization, higher commercial OEM and aftermarket sales resulted in the uptick. However, it was partly offset by inflation and higher annual incentive compensation.
Woodward, Inc. Price, Consensus and EPS Surprise
Woodward, Inc. price-consensus-eps-surprise-chart | Woodward, Inc. Quote
Industrial: Net sales totaled $322 million, up 39% from the prior-year quarter due to higher volumes across all markets. We expected the metric to be $284.4 million.
Segmental earnings were $54 million, up from $21 million in the year-earlier quarter, mainly due to price realization, higher volume and favorable product mix. This was partly offset by inflation and higher annual incentive compensation.
Other Details
Gross margin was up 320 basis points year over year to 24.4%.
Total costs and expenses increased to $679 million, up 16.6% year over year. Adjusted EBITDA was $138.9 million compared with $92.9 million a year ago.
Cash Flow & Liquidity
As of Sep 30, Woodward had $137.5 million in cash and cash equivalents with $645.7 million of long-term debt (less the current portion).
For fiscal 2023, Woodward generated $309 million of net cash from operating activities, rising from $194 million in fiscal 2022. Adjusted free cash flow was $238 million, improving from $144 million in fiscal 2022. The uptick was mainly due to increased earnings.
Woodward repurchased shares worth $126 million in fiscal 2023. In January 2022, WWD authorized a new $800 million two-year stock repurchase program, reinforcing its financial position and positive outlook. The company has $228 million remaining under its share repurchase authorization.
Fiscal 2024 Outlook
Net sales are now expected in the $3.1-$3.25 billion band. The Zacks Consensus Estimate for revenues is pegged at $3.06 billion.
Free cash flow is projected to be between $275 million and $325 million.
Earnings are suggested to be between $4.70 per share and $5.15 per share. The Zacks Consensus Estimate is pegged at $4.59 per share.
Aerospace and Industrial revenues are anticipated to increase 10-14% and 4-6%, respectively.
Woodward currently has a Zacks Rank #4 (Sell).
Key Picks
Some better-ranked stocks worth consideration in the broader technology space are Adobe (ADBE - Free Report) , Synopsys (SNPS - Free Report) and Cadence Design Systems (CDNS - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Adobe’s fiscal 2023 EPS has increased by 0.3% in the past 60 days to $15.93. ADBE’s long-term earnings growth rate is 13.5%.
Adobe’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 3.3%. Shares of ADBE have climbed 82% in the past year.
The Zacks Consensus Estimate for Synopsys’ fiscal 2023 EPS has remained flat in the past 60 days at $11.09. SNPS’ long-term earnings growth rate is 16.7%. Shares of SNPS have gained 62.6% in the past year.
The Zacks Consensus Estimate for Cadence’s 2023 EPS has improved 0.4% in the past 60 days to $5.11.
Cadence’s earnings outpaced the Zacks Consensus Estimate in each of the last four quarters, the average earnings surprise being 4.1%. Shares of CDNS have jumped 61.8% in the past year.