Woodward, Inc. (NASDAQ:) reported second-quarter fiscal 2018 adjusted earnings of 82 cents per share, which surpassed the Zacks Consensus Estimate of 79 cents by 3.8%.
Adjusted earnings included a one-time expense of 22 cents per share, courtesy of the pre-tax restructuring charges.
Excluding the one-time adjustments, the company reported GAAP earnings of 60 cents per share, which came in line with the year-ago quarter’s figure.
Total Revenues
Quarterly net sales of $548 million surpassed the Zacks Consensus Estimate of $526 million by 4.2%. The top line also increased 9.6% from the year-ago figure of $500 million, primarily on sales growth at the Aerospace segment. The quarterly sales were also favorably impacted by the foreign currency exchange rates.
Operational Update
Woodward’s total costs and expenses increased 11% year over year to $499.6 million in the quarter. The rise was led by higher cost of goods sold, restructuring charges as well as research and development expenses.
Quarterly Segmental Performance
Aerospace: Revenues were up 20.5% year over year to $386.3 million, owing to ongoing ramp in production of next generation aircraft, robust commercial aftermarket sales and continued strength in smart weapons.
Earnings totaled $72.96 million, up 25.3% year over year, majorly driven by higher sales volume.
Industrial: Revenues totaled $161.9 million, down 10% year over year due to continued weakness in industrial gas turbines and renewables.
Meanwhile, the bottom line declined 40% to $10.2 million on account of lower sales volume.
Woodward, Inc. Price, Consensus and EPS Surprise
Woodward, Inc. Price, Consensus and EPS Surprise | Woodward, Inc. Quote
Financial Details
As of Mar 31, 2018, cash and cash equivalents were $100.1 million, compared with $87.6 million as of Sep 30, 2017.
Long-term debt (excluding current portion) totaled $588.5 million as of Mar 31, 2018, up from $580.3 million as of Sep 30, 2017.
Free cash flow was $29.2 million in the fiscal second quarter compared with $55.6 million in the year-ago quarter.
At the end of the fiscal second quarter, net cash provided by operating activities was $56.8 million, compared with $130 million in the prior year. Also, payments for property, plant and equipment were $58.5 million, compared with $43.1 million a year ago.
Fiscal 2018 Guidance
Woodward maintains net sales guidance at approximately $2.2 billion for fiscal 2018, with Aerospace sales up approximately 12% and Industrial sales down around 7%, from the prior year.
Adjusted earnings per share are now projected in the band of $3.60-$3.80, compared to the prior range of $3.35-$3.60.
Zacks Rank
Woodward has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Peer Releases
Watts Water Technologies (NYSE:) posted a positive earnings surprise of 1.37% in the previous quarter. The company is expected to report its first quarter results on May 3.
Nanometrics (NASDAQ:) recorded a positive earnings surprise of 15.22% last quarter. The company is likely to release its first quarter results on May 1.
Transcat (NASDAQ:) delivered a positive earnings surprise of 75.0% in the preceding quarter. The company is expected to report its first quarter results on May 15.
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