Woodward Earnings: Margins Suffer as Costs Rise, Profit Falls

Woodward Inc. (NASDAQ:WWD) reported its results for the third quarter. Woodward designs, manufactures, and services energy control systems and components for aircraft and industrial engines and turbines.

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Woodward Inc. Earnings Cheat Sheet

Results: Net income for Woodward Inc. fell to $28.3 million (40 cents per share) vs. $36.1 million (51 cents per share) a year earlier. This is a decline of 21.5% from the year-earlier quarter.

Revenue: Rose 5% to $460.2 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Woodward Inc. fell short of the mean analyst estimate of 45 cents per share. Analysts were expecting revenue of $464.6 million.

Quoting Management: “Operational issues and increased investments in awarded system programs in our Aerospace segment have combined to make this a challenging quarter,” said Thomas A. Gendron, Chairman and Chief Executive Officer. “Ongoing worldwide economic uncertainty is also pressuring sales growth.”

Key Stats:

Last quarter’s profit decrease breaks a streak of four consecutive quarters of year-over-year profit increases. In the second quarter, net income rose 20.8% from the year earlier, while the figure increased 26.9% in the first quarter, 27.6% in the fourth quarter of the last fiscal year and 13.6% in the third quarter of the last fiscal year.

Revenue has increased for four quarters in a row. Revenue increased 11.9% to $468.8 million in the second quarter. The figure rose 11.7% in the first quarter from the year earlier and climbed 18.8% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company fell short of estimates last quarter after being in line with expectations the quarter before with net income of 55 cents.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the fourth quarter has moved down from 71 cents a share to 62 cents over the last ninety days. At $1.99 per share, the average estimate for the fiscal year has fallen from $2.27 ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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