Woodward, Inc. Prepares to Reveal Q1 Fiscal 2025 Earnings
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On February 3, Woodward, Inc. (WWD) will announce its results for the first quarter of fiscal 2025. The Zacks Consensus Estimate predicts revenues to be around $778.5 million, reflecting a 1.1% decrease from the previous year. Additionally, earnings per share are expected to be $1.14, showcasing a 21.4% decline year-over-year.
Notably, WWD has consistently exceeded the Zacks Consensus Estimate in the last four quarters, recording an average surprise of 21.2%. Over the past year, Woodward’s stock has appreciated by 34.9%, compared to a growth of 34.1% in its sub-industry.
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Key Factors Influencing WWD’s First Quarter Performance
The upcoming quarterly performance is expected to be driven mainly by the Aerospace segment. Woodward’s strategic focus and operational strengths have been instrumental in this anticipated growth.
Defense activities, along with an upswing in commercial Original Equipment Manufacturer (OEM) and aftermarket sales—stimulated by increased passenger traffic and aircraft utilization—may further enhance this segment’s performance. Supply chain improvements have buoyed defense aftermarket sales, while higher sales of guided weapons and ground vehicles are expected to boost defense OEM sales.
Meanwhile, the Industrial segment is likely to see benefits from a growing demand for power generation and backup power needs for data centers. Increased power demand, aimed at ensuring grid stability, presents another advantage. The marine sector is also showing positive momentum due to rising utilization and shipbuilding rates.
Additionally, favorable investment outlooks in refining and petrochemical projects in China, the Middle East, and India could serve as positive drivers for the oil and gas segment. However, challenges such as fluctuating demand for heavy-duty trucks in China, global economic uncertainty, and cost increases remain key concerns.
WWD’s Price and EPS Trend
Woodward, Inc. price-eps-surprise | Woodward, Inc. Quote
A decline in demand for heavy-duty trucks in China during the previous quarter led to higher inventories for customers, which in turn caused a drop in orders for on-highway natural gas trucks. Sales of these trucks amounted to $22 million in the last quarter. Moving forward, management predicts further reductions in the first quarter of fiscal 2025 due to a weak local economy and diminishing fuel price spreads, anticipating sales of only $5 million in this category.
Concerns also linger regarding a potential slowdown in the oil and gas sector demand, alongside ongoing supply-chain challenges in the Aerospace area.
For the fiscal first quarter, projected revenues for the Aerospace segment are estimated to increase by 8.9% to $501.7 million, while the Industrial segment could see a decline of 14.6%, dropping to $278.3 million.
Recent Transactions by WWD
On December 20, 2024, Woodward entered a definitive agreement to acquire Safran Electronics & Defense’s electromechanical actuation business in the U.S., Mexico, and Canada. This strategic acquisition includes intellectual property, operational assets, skilled personnel, and key customer contracts related to aircraft Horizontal Stabilizer Trim Actuation systems, crucial for safe and effective flight operations on platforms like the Airbus A350.
Earlier, on November 18, 2024, Woodward finalized an agreement to sell its heavy-duty gas turbines combustion parts business, located in Greenville, SC, to GE Vernova. This transaction represents a pivotal shift in the energy and aerospace sectors, allowing Woodward to concentrate on its primary growth areas while enhancing GE Vernova’s operational reach.
The company is committed to ensuring a smooth transition for its Greenville workforce, highlighting its dedication to its employees and providing ongoing opportunities within GE Vernova. This transaction is expected to close in early 2025, pending the usual conditions.
Our Forecast for WWD
Based on our model, WWD is not anticipated to surpass earnings expectations this quarter. A combination of a positive Earnings ESP and a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) typically suggests a successful earnings beat, but this scenario does not apply in this case.
WWD currently has an Earnings ESP of -0.79% and a Zacks Rank of 3. To identify stocks with strong potential for solid earnings results, refer to our Earnings ESP Filter.
Stocks Worth Watching
Consider these three stocks, which exhibit attributes that may contribute to generating positive earnings surprises in this reporting cycle.
QUALCOMM Incorporated (QCOM) presents an Earnings ESP of +3.34% and holds a Zacks Rank of 2. Scheduled to release quarterly earnings on February 5, QCOM’s expected earnings and revenues are $2.93 per share and $10.92 billion, respectively. QCOM shares have increased by 15.8% in the past year.
O’Reilly Automotive, Inc. (ORLY) currently enjoys an Earnings ESP of +6.71% and a Zacks Rank of 2. ORLY will announce its quarterly numbers on February 5, targeting estimated earnings of $9.84 per share and revenues of $4.03 billion. The stock has risen 28.1% year-over-year.
Amazon.com, Inc. (AMZN) displays an Earnings ESP of +4.78% and sits at a Zacks Rank of 2. AMZN is set to deliver quarterly figures on February 6, with expected earnings of $1.52 per share and revenues of $187.28 billion. AMZN shares have appreciated 51.2% over the last year.
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The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
