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Dec 31, 2022
Woodward Q1 2023 Earnings Report
Delivered earnings in line with expectations, but the Industrial segment had a challenging quarter.
Key Takeaways
Woodward reported a 14% increase in net sales, reaching $619 million, but profitability was impacted by ongoing industry-wide challenges. Net earnings were $30 million, or $0.49 per share.
Net sales increased by 14% to $619 million compared to the same period last year.
Net earnings were $30 million, or $0.49 per share, for the quarter.
Aerospace segment sales increased by 18%, driven by recovery in passenger traffic and increased aircraft utilization.
Industrial segment sales increased by 9%, primarily due to higher marine sales and strong industrial turbomachinery sales.
Woodward
Woodward
Woodward Revenue by Segment
Revenue by Segment
Aerospace Revenue
CapyFin.comIndustrial Revenue
CapyFin.com Forward Guidance
Woodward’s fiscal 2023 outlook assumes improving operational and financial performance while continuing to navigate a challenging industry-wide environment.
Positive Outlook
- Total net sales for fiscal 2023 are expected to be between $2.60 billion and $2.75 billion.
- Aerospace sales growth percentage is expected to be between 14 and 19 percent.
- Industrial sales growth percentage is expected to be flat to up 5 percent.
- Aerospace segment earnings as a percent of segment net sales are expected to increase by approximately 150 to 200 basis points.
- Free cash flow is expected to be between $200 million and $250 million, with an anticipated free cash flow conversion rate of greater than 100 percent.
Challenges Ahead
- The supply chain and labor disruptions are anticipated to begin to subside during the second half of the fiscal year.
- The timing of improvement is uncertain and results could be negatively impacted if supply chain and labor disruptions do not improve as anticipated.
- EBIT is expected to include approximately $60 million of annual variable incentive compensation costs, an increase of approximately $50 million over fiscal year 2022.
- The effective tax rate is expected to be approximately 19 percent.
- Capital expenditures are expected to be approximately $80 million.
Revenue & Expenses
Visualization of income flow from segment revenue to net income