Woodward Reports First Quarter Fiscal Year 2025 Results

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Woodward's Q1 FY2025 performance reflects a tale of two segments, with aerospace strength offsetting industrial weakness. The Aerospace segment showcased robust growth, particularly in aftermarket revenues (commercial +19%, defense +8%), despite Boeing delivery challenges. The segment's margin expansion to 19.2% demonstrates strong pricing power and operational execution.

The Industrial segment's sharp decline (-15%) was primarily driven by a 33% drop in transportation revenues, though partially balanced by 7% growth in both power generation and oil & gas sectors. The significant margin compression to 14.4% suggests substantial operational deleverage.

Notable concerns include the substantial decline in free cash flow to $1M and increased leverage, with total debt up 25% to $902M and EBITDA leverage rising to 1.5x from 1.3x. However, the company's confidence in maintaining most of its full-year guidance while improving the adjusted EPS range to $5.85-$6.25, supported by a more favorable tax rate, suggests management's ability to navigate near-term challenges.

02/03/2025 - 04:00 PM

~Results in Line with Expectations, on Track to Deliver Full-Year Guidance~

FORT COLLINS, Colo., Feb. 03, 2025 (GLOBE NEWSWIRE) -- Woodward, Inc. (NASDAQ: WWD) today reported financial results for its first quarter of fiscal year 2025.

All amounts are presented on an as reported (U.S. GAAP) basis unless otherwise indicated. All per share amounts are presented on a fully diluted basis. All comparisons are made to the same period of the prior year unless otherwise stated. All references to years are references to the Company’s fiscal year unless otherwise stated.

First Quarter Overview

	First Quarter 2025
Net sales	$773M, -2%
Net earnings	$87M, -3%
Adjusted net earnings¹	$83M, -8%
Earnings per share (EPS)	$1.42, -3%
Adjusted EPS¹	$1.35, -7%
Cash from operations	$35M, -26%
Free cash flow¹	$1M, -81%

“We’re pleased with our strong start to 2025, as our first quarter results were in line with our expectations. Our Aerospace segment performed well with growth in both sales and margin despite a pause in deliveries for some Boeing product lines and a reduced delivery rate in others,” said Chip Blankenship, Chairman and Chief Executive Officer. “High aircraft utilization continued to drive both commercial and defense aftermarket demand. As anticipated, increased smart defense demand contributed to strong sales in the quarter. In Industrial, broad-based strength in power generation, oil & gas, and marine transportation was offset by an expected decline in sales related to China on-highway natural gas trucks.

“First quarter results reflect the effective execution of our strategy, reinforcing our confidence in our ability to achieve our full-year guidance. We remain committed to operational excellence, innovation and delivering profitable growth to build a stronger, more focused Woodward.”

First Quarter Fiscal Year 2025 Company Results

Total Company Results

	Three Months Ended December 31,
Dollars in millions, except per share amounts	2024			2023			Year over Year
Income Statement
Total Sales	$	773		$	787			-2	%
Net Earnings		87			90			-3	%
Adjusted Net Earnings		83			90			-8	%
EPS	$	1.42		$	1.46			-3	%
Adjusted EPS	$	1.35		$	1.45			-7	%
EBIT		113			120			-6	%
Adjusted EBIT¹		107			119			-10	%
Effective Tax Rate		14.5	%		17.9	%	-340		bps
Adjusted Effective Tax Rate¹		14.0	%		17.7	%	-370		bps


Cash Flow and Financial Position
Cash from operating activities	$	35		$	47			-26	%
Free cash flow		1			5			-81	%

Dividends Paid	$	15		$	13			12	%
Share Repurchases		35			-			100	%
Total Debt	902			719			25		%
EBITDA Leverage	1.5x			1.3x

Segment Results

Aerospace
	Three Months Ended December 31,
Dollars in millions	2024			2023			Year over Year
Commercial OEM	$	154		$	171			-10	%
Commercial Aftermarket		164			138			19	%
Defense OEM		113			93			21	%
Defense Aftermarket		63			58			8	%

Revenue		494			461			7	%
Segment Earnings		95			79			20	%
Segment Margin %		19.2	%		17.2	%	200		bps

The increase in Aerospace segment earnings in the first quarter was primarily a result of price realization, partially offset by inflation, unfavorable mix, and lower volumes.

Industrial
	Three Months Ended December 31,
Dollars in millions	2024			2023			Year over Year
Transportation	$	117		$	174			-33	%
Power generation		105			98			7	%
Oil and gas		57			53			7	%

Revenue		279			326			-15	%
Segment Earnings		40			67			-40	%
Segment Margin %		14.4	%		20.5	%	-610		bps

The decrease in Industrial segment earnings in the first quarter was primarily a result of lower volume and unfavorable mix, partially offset by price realization and favorable foreign currency exchange rates.

Nonsegment
	Three Months Ended December 31,
Dollars in millions	2024			2023			Year over Year
Nonsegment Expense	$	(22	)	$	(26	)		-16	%
Adjusted Nonsegment Expenses		(28	)		(27	)		4	%

Fiscal Year 2025 Guidance

Woodward reaffirms its 2025 guidance with the exception of adjusted effective tax rate and adjusted earnings per share. Based on the favorable tax rate in the first quarter, the adjusted effective tax rate is now expected to be approximately 19 percent. As a result, the Company narrowed its adjusted earnings per share range to $5.85-6.25.

*Woodward, Inc. and Subsidiaries*
Revised Guidance
(In millions, except per share amount and percentages)

	Prior	Revised
	FY25 Guidance issued on	FY25 Guidance issued on
	November 25, 2024	February 3, 2025
Total Company
Sales	$3,300 - $3,500	No change
Adjusted Effective Tax Rate	~20%	~19%
Free Cash Flow	$350 - $400	No change
Capital Expenditures	~$115	No change
Shares	~61.5	No change
Adjusted EPS	$5.75 - $6.25	$5.85 - $6.25

Segment Data
Aerospace
Sales Growth	Up 6% to 13%	No change
Segment Earnings (% of Sales)	20% - 21%	No change
Industrial
Sales Growth	Down 7% to 11%	No change
Segment Earnings (% of Sales)	13% - 14%	No change

Conference Call

Woodward will hold an investor conference call at 5:00 p.m. ET, February 3, 2025, to provide an overview of the financial performance for its first quarter of fiscal year 2025 ending December 31, 2024, business highlights, and guidance for fiscal 2025. You are invited to listen to the live webcast of our conference call, or a recording, and view or download accompanying presentation slides at our website, www.woodward.com².

You may also listen to the call by dialing 1-800-715-9871 (domestic) or 1-646-307-1963 (international). Participants should call prior to the start time to allow for registration; the Conference ID is 4675940. The call and presentation will be available on the website by selecting “Investors/Events & Presentations” from the menu and will remain accessible on the company’s website for one year.

About Woodward, Inc.

Woodward is the global leader in the design, manufacture, and service of energy conversion and control solutions for the aerospace and industrial equipment markets. Our purpose is to design and deliver energy control solutions our partners count on to power a clean future. Our innovative fluid, combustion, electrical, propulsion and motion control systems perform in some of the world’s harshest environments. Woodward is a global company headquartered in Fort Collins, Colorado, USA. Visit our website at www.woodward.com.

Cautionary Statement

Information in this press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties, including, but not limited to, our focus on and commitment to growth, operational excellence and innovation, including whether such focus ultimately leads to profitable growth and long-term term success, and statements regarding our business, expectations and guidance for fiscal year 2025, including our guidance for sales, segment sales as compared to the prior fiscal year, adjusted earnings per share, segment earnings margin, adjusted effective tax rate, free cash flow, capital expenditures, and diluted weighted average shares outstanding, as well as our assumptions regarding our guidance and our progress toward achieving it, and anticipated trends in our business and markets. Factors that could cause actual results and the timing of certain events to differ materially from the forward-looking statements include, but are not limited to: (1) global economic uncertainty and instability, including in the financial markets that affect Woodward, its customers, and its supply chain; (2) risks related to constraints and disruptions in the global supply chain and labor markets; (3) Woodward’s long sales cycle; (4) risks related to Woodward’s concentration of revenue among a relatively small number of customers; (5) Woodward’s ability to implement and realize the intended effects of any restructuring efforts; (6) Woodward’s ability to successfully manage competitive factors including expenses and fluctuations in sales; (7) changes and consolidations in the aerospace market; (8) Woodward’s financial obligations including debt obligations and tax expenses and exposures; (9) risks related to Woodward’s U.S. government contracting activities including potential changes in government spending patterns; (10) Woodward’s ability to protect its intellectual property rights and avoid infringing the intellectual property rights of others; (11) changes in the estimates of fair value of reporting units or of long-lived assets; (12) environmental risks; (13) Woodward’s continued access to a stable workforce and favorable labor relations with its employees; (14) Woodward’s ability to manage various regulatory and legal matters; (15) risks from operating internationally; (16) cybersecurity and other technological risks; and other risk factors and risks described in Woodward's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended September 30, 2024, as well as its Quarterly Report on Form 10-Q, which we expect to file shortly, and other risks described in Woodward’s filings with the Securities and Exchange Commission. The forward-looking statements contained in this press release are made as of the date hereof and Woodward assumes no obligation to update such statements, except as required by applicable law.

*Woodward, Inc. and Subsidiaries*
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
*(Unaudited – in thousands, except per share amounts)*

	Three Months Ended December 31,
	2024			2023
Net sales	$	772,725		$	786,730
Costs and expenses:
Cost of goods sold		583,091			582,381
Selling, general, and administrative expenses		69,696			74,511
Research and development costs		30,207			30,794
Interest expense		12,341			11,436
Interest income		(1,377	)		(1,473	)
Other (income) expense, net		(23,087	)		(20,639	)
Total costs and expenses		670,871			677,010
Earnings before income taxes		101,854			109,720
Income taxes		14,763			19,676
Net earnings	$	87,091		$	90,044

Earnings per share amounts:
Basic earnings per share	$	1.47		$	1.50
Diluted earnings per share	$	1.42		$	1.46
Weighted average common shares outstanding:
Basic		59,216			60,021
Diluted		61,141			61,846

Cash dividends paid per share	$	0.25		$	0.22

*Woodward, Inc. and Subsidiaries*
CONDENSED CONSOLIDATED BALANCE SHEETS
*(Unaudited – in thousands)*

	December 31,		September 30,
	2024		2024
Assets
Current assets:
Cash and cash equivalents	$	283,726	$	282,270
Accounts receivable		692,599		770,066
Inventories		632,002		609,092
Assets held for sale		32,047		-
Income taxes receivable		16,268		22,016
Other current assets		67,954		60,167
Total current assets		1,724,596		1,743,611
Property, plant, and equipment, net		925,471		940,715
Goodwill		781,928		806,643
Intangible assets, net		404,417		440,419
Deferred income tax assets		87,488		84,392
Other assets		357,482		353,135
Total assets	$	4,281,382	$	4,368,915

Liabilities and stockholders’ equity
Current liabilities:
Short-term debt	$	258,000	$	217,000
Current portion of long-term debt		160,975		85,719
Accounts payable		224,035		287,457
Income taxes payable		38,742		40,692
Liabilities held for sale		4,322		-
Accrued liabilities		228,748		292,642
Total current liabilities		914,822		923,510
Long-term debt, less current portion		483,199		569,751
Deferred income tax liabilities		115,984		121,858
Other liabilities		558,956		577,380
Total liabilities		2,072,961		2,192,499
Stockholders’ equity		2,208,421		2,176,416
Total liabilities and stockholders’ equity	$	4,281,382	$	4,368,915

*Woodward, Inc. and Subsidiaries*
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
*(Unaudited – in thousands)*

	Three Months Ended December 31,
	2024			2023
Net cash provided by operating activities	$	34,516		$	46,789

Cash flows from investing activities:
Payments for purchase of property, plant, and equipment		(33,574	)		(41,812	)
Proceeds from sale of assets and short-term investments		36			36
Proceeds from business divestiture		1,438			-
Net cash used in investing activities		(32,100	)		(41,776	)

Cash flows from financing activities:
Cash dividends paid		(14,781	)		(13,209	)
Proceeds from sales of treasury stock		28,876			15,267
Payments for repurchases of common stock		(35,473	)		-
Borrowings on revolving lines of credit and short-term borrowings		668,300			728,600
Payments on revolving lines of credit and short-term borrowings		(627,300	)		(663,500	)
Payments of long-term debt and finance lease obligations		(236	)		(75,249	)
Net cash provided by (used in) financing activities		19,386			(8,091	)
Effect of exchange rate changes on cash and cash equivalents		(20,346	)		9,979
Net change in cash and cash equivalents		1,456			6,901
Cash and cash equivalents at beginning of year		282,270			137,447
Cash and cash equivalents at end of period	$	283,726		$	144,348

*Woodward, Inc. and Subsidiaries*
SEGMENT NET SALES AND NET EARNINGS
*(Unaudited – in thousands)*

	Three Months Ended December 31,
	2024			2023
Net sales:
Aerospace	$	493,882		$	460,756
Industrial		278,843			325,974
Total consolidated net sales	$	772,725		$	786,730
*Segment earnings:**
Aerospace	$	94,725		$	79,002
As a percent of segment net sales		19.2	%		17.2	%
Industrial		40,197			66,881
As a percent of segment net sales		14.4	%		20.5	%
Total segment earnings		134,922			145,883
Nonsegment expenses		(22,104	)		(26,200	)
EBIT		112,818			119,683
Interest expense, net		(10,964	)		(9,963	)
Consolidated earnings before income taxes	$	101,854		$	109,720

^{*This schedule reconciles segment earnings, which exclude certain costs, to consolidated earnings before taxes.}

Payments for property, plant and equipment	$	33,574		$	41,812
Depreciation expense	$	20,962		$	20,226

*Woodward, Inc. and Subsidiaries*
RECONCILIATION OF NET EARNINGS TO ADJUSTED NET EARNINGS¹
*(Unaudited – in thousands, except per share amounts)*

	Three Months Ended December 31,
	2024						2023
	Net Earnings			Earnings Per Share			Net Earnings			Earnings Per Share
Net earnings (U.S. GAAP)	$	87,091		$	1.42		$	90,044		$	1.46
Non-U.S. GAAP adjustments:
Product rationalization^a		(9,361	)		(0.15	)		-			-
Business development activities^b		3,518			0.06			4,238			0.07
Non-recurring gain related to a previous acquisition^a		-			-			(4,803	)		(0.09	)
Tax effect of Non-U.S. GAAP net earnings adjustments		1,319			0.02			332			0.01
Total non-U.S. GAAP adjustments		(4,524	)		(0.07	)		(233	)		(0.01	)
Adjusted net earnings (Non-U.S. GAAP)	$	82,567		$	1.35		$	89,811		$	1.45

^{a. Presented in the line item "Other (income) expense, net" in Woodward's Condensed Consolidated Statement of Earnings.}
^{b. Presented in item "Selling, general and administrative" expenses in Woodward's Condensed Consolidated Statement of Earnings.}

*Woodward, Inc. and Subsidiaries*
RECONCILIATION OF INCOME TAX EXPENSE TO ADJUSTED INCOME TAX EXPENSE¹
*(Unaudited – in thousands)*

	Three Months Ended December 31,
	2024			2023
Income tax expense (U.S. GAAP)	$	14,763		$	19,676
Tax effect of Non-U.S. GAAP net income adjustments		(1,319	)		(332	)
Adjusted income tax expense (Non-U.S. GAAP)	$	13,444		$	19,344
Adjusted effective tax rate (Non-U.S. GAAP)		14.0	%		17.7	%

*Woodward, Inc. and Subsidiaries*
RECONCILIATION OF NET EARNINGS TO EBIT¹AND ADJUSTED EBIT¹
*(Unaudited – in thousands)*

	Three Months Ended December 31,
	2024			2023
Net earnings (U.S. GAAP)	$	87,091		$	90,044
Income tax expense		14,763			19,676
Interest expense		12,341			11,436
Interest income		(1,377	)		(1,473	)
EBIT (Non-U.S. GAAP)		112,818			119,683
Total non-U.S. GAAP adjustments*		(5,843	)		(565	)
Adjusted EBIT (Non-U.S. GAAP)	$	106,975		$	119,118

^{*See Reconciliation of Net Earnings to Adjusted Net Earnings¹ table above for the list of Non-U.S. GAAP adjustments made in the applicable periods.}

*Woodward, Inc. and Subsidiaries*
RECONCILIATION OF NET EARNINGS TO EBITDA¹ AND ADJUSTED EBITDA¹
*(Unaudited – in thousands)*

	Three Months Ended December 31,
	2024			2023
Net earnings (U.S. GAAP)	$	87,091		$	90,044
Income tax expense		14,763			19,676
Interest expense		12,341			11,436
Interest income		(1,377	)		(1,473	)
Amortization of intangible assets		6,914			8,599
Depreciation expense		20,962			20,226
EBITDA (Non-U.S. GAAP)		140,694			148,508
Total non-U.S. GAAP adjustments*		(5,843	)		(565	)
Adjusted EBITDA (Non-U.S. GAAP)	$	134,851		$	147,943

^{*See Reconciliation of Net Earnings to Adjusted Net Earnings¹ table above for the list of Non-U.S. GAAP adjustments made in the applicable periods.}

*Woodward, Inc. and Subsidiaries*
RECONCILIATION OF NONSEGMENT EXPENSES TO ADJUSTED NONSEGMENT EXPENSES¹
*(Unaudited – in thousands)*

	Three-Months Ended December 31,
	2024			2023
Nonsegment expenses (U.S. GAAP)	$	(22,104	)	$	(26,200	)
Product rationalization	(9,361		)		-
Business development activities	3,518				4,238
Non-recurring gain related to a previous acquisition	-				(4,803	)
Adjusted nonsegment expenses (Non-U.S. GAAP)	$	(27,947	)	$	(26,765	)

*Woodward, Inc. and Subsidiaries*
RECONCILIATION OF CASH FLOW FROM OPERATING ACTIVITIES TO FREE CASH FLOW¹
*(Unaudited – in thousands)*

	Three Months Ended December 31,
	2024			2023
Net cash provided by operating activities (U.S. GAAP)	$	34,516		$	46,789
Payments for property, plant, and equipment		(33,574	)		(41,812	)
Free cash flow (Non-U.S. GAAP)	$	942		$	4,977

¹Adjusted and Non-U.S. GAAP Financial Measures: Adjusted net earnings, adjusted earnings per share, adjusted EBIT, adjusted EBITDA, adjusted effective tax rate, and adjusted nonsegment expenses exclude, as applicable, (i) a non-recurring gain related to a previous acquisition, (ii) costs related to business development activities, and (iii) gains related to product rationalization activities. The product rationalization adjustment pertains to gains related to the elimination of certain product lines. The Company believes that these excluded items are short‐term in nature, not directly related to the ongoing operations of the business, and therefore, the exclusion of them illustrates more clearly how the underlying business of Woodward is performing.

EBIT (earnings before interest and taxes), EBITDA (earnings before interest, taxes, depreciation and amortization), free cash flow, adjusted net earnings, adjusted earnings per share, adjusted EBIT, adjusted EBITDA, adjusted effective tax rate, and adjusted nonsegment expenses are financial measures not prepared and presented in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). Management uses EBIT and adjusted EBIT to evaluate Woodward’s operating performance without the impacts of financing and tax related considerations. Management uses EBITDA and adjusted EBITDA in evaluating Woodward’s operating performance, making business decisions, including developing budgets, managing expenditures, forecasting future periods, and evaluating capital structure impacts of various strategic scenarios. Management also uses free cash flow, which is derived from net cash provided by or used in operating activities less payments for property, plant, and equipment, in reviewing the financial performance of Woodward’s various business segments and evaluating cash generation levels. Securities analysts, investors, and others frequently use EBIT, EBITDA, free cash flow, in their evaluation of companies, particularly those with significant property, plant, and equipment, and intangible assets that are subject to amortization. The use of any of these non-U.S. GAAP financial measures is not intended to be considered in isolation of, or as a substitute for, the financial information prepared and presented in accordance with U.S. GAAP. Because adjusted net earnings, adjusted earnings per share, EBIT, EBITDA, adjusted EBIT, and adjusted EBITDA exclude certain financial information compared with net earnings, the most comparable U.S. GAAP financial measure, users of this financial information should consider the information that is excluded. Free cash flow do not necessarily represent funds available for discretionary use and is not necessarily a measure of our ability to fund our cash needs. Woodward’s calculations of EBIT, EBITDA, adjusted net earnings, adjusted earnings per share, adjusted EBIT, adjusted EBITDA, adjusted effective tax rate, adjusted nonsegment expenses, and free cash flow may differ from similarly titled measures used by other companies, limiting their usefulness as comparative measures.

²Website, Facebook, X: Woodward has used, and intends to continue to use, its Investor Relations website, LinkedIn page, Facebook page, and X handle as means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

Contact:

Dan Provaznik
Director, Investor Relations
970-498-3849
Dan.Provaznik@woodward.com

FAQ

What were Woodward's (WWD) Q1 2025 earnings per share?

Woodward reported Q1 2025 earnings per share of $1.42 (GAAP) and adjusted EPS of $1.35, representing decreases of 3% and 7% year-over-year, respectively.

How did Woodward's (WWD) Aerospace segment perform in Q1 2025?

Woodward's Aerospace segment performed well with revenue growing 7% to $494M and segment margin improving to 19.2%, despite challenges with Boeing deliveries.

What is Woodward's (WWD) revised earnings guidance for FY2025?

Woodward narrowed its FY2025 adjusted EPS guidance to $5.85-6.25 and revised its adjusted effective tax rate expectation to approximately 19%.

How much did Woodward's (WWD) Industrial segment revenue decline in Q1 2025?

Woodward's Industrial segment revenue declined 15% year-over-year to $279M in Q1 2025, primarily due to lower transportation sales.

What was Woodward's (WWD) free cash flow in Q1 2025?

Woodward reported free cash flow of $1M in Q1 2025, representing an 81% decrease from the same period last year.

Woodward Reports First Quarter Fiscal Year 2025 Results

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FAQ

What were Woodward's (WWD) Q1 2025 earnings per share?

How did Woodward's (WWD) Aerospace segment perform in Q1 2025?

What is Woodward's (WWD) revised earnings guidance for FY2025?

How much did Woodward's (WWD) Industrial segment revenue decline in Q1 2025?

What was Woodward's (WWD) free cash flow in Q1 2025?

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Woodward Reports First Quarter Fiscal Year 2025 Results

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What were Woodward's (WWD) Q1 2025 earnings per share?

How did Woodward's (WWD) Aerospace segment perform in Q1 2025?

What is Woodward's (WWD) revised earnings guidance for FY2025?

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