Woodward, Inc WWD has knocked the socks off its investors by reporting an impressive adjusted net earnings of $1.33 per share for the fourth quarter of fiscal 2023, trouncing the Zacks Consensus Estimate by 4.7%. The year-ago quarter saw adjusted net earnings of 84 cents, a remarkable improvement.
Net sales for this quarter also skyrocketed, shooting up by a staggering 21% year over year to reach $777 million. The commendable surge was mainly driven by heightened sales in the Aerospace and Industrial segments. This splendid performance sent ripples of excitement through the investor community. The top line not only surpassed the consensus estimate but also exceeded the wildest predictions, causing much celebration and fervent trading. However, the stock faltered momentarily, dipping 2.1% in the after-market trading hours on Nov 16.
In the past year, shares of WWD have put on an astonishing 36.2%, leaving many of its industry peers in the dust as they scrambled to catch up. Indeed, Woodward has truly been a shining star in the firmament of financial success.
Image Source: Zacks Investment Research
Aerospace: Soaring High
Aerospace: The Aerospace segment experienced a meteoric rise, with net sales reaching a dazzling $455 million, marking an 11% year-over-year upsurge. Such lofty heights were a direct result of increased commercial OEM and commercial aftermarket sales, fueled by a resurgence in passenger traffic and fleet utilization. While Defense OEM sales languished due to diminished guided weapons sales, the overall performance defied expectations, eliciting awe and admiration.
Segmental earnings reached $78 million, ascending from $63 million a year prior. This remarkable feat can be credited to a combination of price realization, heightened commercial OEM and aftermarket sales, and a pinch of inflation and higher annual incentive compensation. Such a stellar performance has raised the industry’s collective eyebrows in wonder.
Industrial: Reaching for the Stars
Industrial: The Industrial segment staged a breathtaking ascent, with net sales surging to an impressive $322 million, marking a jaw-dropping 39% increase from the prior-year quarter. This phenomenal leap was propelled by heightened volumes across all markets, leaving many industry pundits bewildered.
Segmental earnings in this stratospheric rise reached $54 million, soaring from $21 million in the year-earlier quarter. This remarkable feat can be attributed to an amalgamation of price realization, increased volume, and a favorable product mix, tempered only by inflation and higher annual incentive compensation. Observers were left breathless as they marveled at this unprecedented achievement.
Other Details: Riding the Wind
The company’s gross margin surged by an impressive 320 basis points year over year to hit 24.4%, a remarkable feat that has set the industry abuzz.
Total costs and expenses climbed to $679 million, marking a 16.6% year-over-year increase, yet Woodward still managed to report an adjusted EBITDA of $138.9 million, compared with $92.9 million a year ago. This remarkable display of financial fortitude has left most competitors scratching their heads in disbelief.
Cash Flow & Liquidity: A Shower of Wealth
As of Sep 30, Woodward had a staggering $137.5 million in cash and cash equivalents, alongside a substantial $645.7 million of long-term debt (excluding the current portion).
In the fiscal 2023, Woodward raked in a whopping $309 million of net cash from operating activities, a substantial jump from $194 million in fiscal 2022. Adjusted free cash flow also surged to $238 million, a significant improvement from $144 million in fiscal 2022. This colossal increase was predominantly due to enhanced earnings, much to the envy of its competitors.
Moreover, Woodward gleefully 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 still has a jaw-dropping $228 million remaining under its share repurchase authorization, a move that left others green with envy.
Fiscal 2024 Outlook: A Vision of Greatness
Net sales are now expected to reach the impressive $3.1-$3.25 billion mark. Expectations are running high, with the Zacks Consensus Estimate for revenues pegged at $3.06 billion.
Free cash flow is anticipated to be a substantial $275 million to $325 million, energizing enthusiastic chatter among the investment community.
Earnings are forecasted to reach dizzying heights between $4.70 per share and $5.15 per share, a prospect that has set the market abuzz with anticipation. The Zacks Consensus Estimate is pegged at $4.59 per share, but the company aims to exceed even those lofty expectations.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.