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Sep 30, 2021
Woodward Q4 2021 Earnings Report
Reported solid performance in 2021 with effective cost control and strong working capital management, mitigating impacts of COVID-19 and supply chain disruptions.
Key Takeaways
Woodward reported a 7% increase in net sales for the fourth quarter of fiscal 2021, reaching $570 million. Net earnings were $50 million, or $0.76 per share, compared to $57 million, or $0.89 per share in the prior year. The company's performance was impacted by global supply chain disruptions, but effective cost control and working capital management helped mitigate these effects.
Net sales for the fourth quarter of fiscal 2021 increased by 7% to $570 million.
Net earnings for the fourth quarter of 2021 were $50 million, or $0.76 per share.
Aerospace segment net sales increased by 12% to $377 million due to higher OEM aircraft production rates and recovery in domestic passenger traffic.
Industrial segment net sales decreased by 1% to $193 million due to lower industrial gas turbines sales and weakness in natural gas engines in China.
Woodward
Woodward
Forward Guidance
Total net sales for fiscal 2022 are expected to be between $2.45 and $2.65 billion, with growth and profitability potentially affected by COVID-19 and supply chain disruptions. Earnings per share is expected to be between $3.55 and $3.95.
Positive Outlook
- End markets and supply chain disruptions are anticipated to improve in fiscal year 2022.
- Aerospace and Industrial sales growth percentage are each expected to be in the low double digits to mid-teens.
- Aerospace segment earnings as a percent of segment net sales are expected to increase by approximately 200 to 300 basis points.
- Industrial segment earnings as a percent of segment net sales are expected to be approximately flat to up by 150 basis points.
- Free cash flow is expected to be approximately $315 million, generating a free cash flow conversion rate of greater than 100 percent.
Challenges Ahead
- Uncertainty and volatility around the pace of the recovery is expected to persist.
- Growth and profitability in both segments could be negatively affected if COVID-19 and supply chain disruptions do not improve.
- The pace of inflation puts additional pressure on labor and material costs.
- The effective tax rate is expected to be approximately 21 percent.
- Higher working capital requirements, primarily driven by accounts receivable are anticipated.