Woodward, Inc WWD is scheduled to report fourth-quarter fiscal 2024 results on Nov. 25.
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The Zacks Consensus Estimate for revenues is pegged at $806.8 million, which implies growth of 3.8% from the year-ago reported number. The consensus mark for earnings is pegged at $1.22 per share, indicating a year-over-year decline of 8.3%.
WWD’s earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 18.5%. Woodward’s shares have gained 30.5% compared with the sub-industry and the S&P 500 Index’s growth of 39% and 30.4%, respectively, in the year-to-date period.
Factors To Note Ahead of WWD’s Q4 Results
The company’s performance in the fiscal fourth quarter is likely to have been powered by growth in the Aerospace segment, indicating its strategic positioning coupled with operational excellence.
Momentum in commercial OEM and commercial aftermarket sales driven by increased passenger traffic, aircraft utilization and price realization is likely to have cushioned the Aerospace segment performance. Defense aftermarket sales are benefiting from supply-chain stabilization and higher output. Defense OEM sales are likely to have been affected by program delays in fixed and rotor wings. Higher guided vehicle sales are likely to have cushioned performance.
For fiscal 2024, Aerospace segment revenues are anticipated to increase in the range of 12-14%, unchanged from previous guidance. Despite supply-chain disruptions, management remains confident of achieving revenues within the guided range for the Aerospace segment.
The Industrial segment is anticipated to have benefited from increasing demand for power generation, notably in Asia, and the continued requirement for backup power for data centers. Higher power demand to support grid stability is another tailwind. Increasing demand for alternative fuels across the marine industry, as well as momentum in the global marine market brought on by higher utilization and rising shipbuilding rates, bode well.
Within oil and gas, higher global natural gas demand along with an encouraging outlook for domestic shale oil production as well as China and India’s refining and petrochemical activities are other growth drivers.
Woodward, Inc. Price and EPS Surprise
Woodward, Inc. price-eps-surprise | Woodward, Inc. Quote
Volatile China on-highway natural gas truck market, global macroeconomic weakness and rising costs are concerns. Weaker demand for heavy-duty trucks in China this quarter led to higher inventory levels at customers. This caused a decline in China on-highway orders for the fiscal fourth quarter. Sales for on-highway natural gas trucks in China were $55 million in the fiscal third quarter.
Management expects further decline in the fiscal fourth quarter, with sales in the range of $10 million to $15 million. Owing to lower China on-highway deliveries, management now expects Industrial segment revenues to increase in the band of 11-13% compared with the prior guided range of 13-15%.
We expect revenues from the Aerospace segment to be up 12.3% to $511 million and the Industrial segment to decline 8.4% to $295.3 million for the fiscal fourth quarter.
For fiscal 2024, we expect revenues from the Aerospace and Industrial segments to be up 12.4% and 12.5%, respectively.
WWD's Recent Development
In November 2024, Woodward inked a definitive agreement to sell its heavy-duty gas turbines combustion parts business, based in Greenville, SC, to GE Vernova. The deal marks a significant development in the energy and aerospace sectors, aiming to bolster GE Vernova’s operational capabilities while enabling Woodward to focus on its core growth areas.
While the transaction's financial terms have not been disclosed, Woodward has determined that the deal is not financially material to its operations. By focusing on its core competencies, the company aims to position itself as a stronger player in aerospace and industrial energy control solutions.
What Our Model Says About WWD
Our proven model does not predict an earnings beat for WWD this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.
WWD has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are some stocks you may consider, as our proven model shows that these have the right mix of elements to beat estimates this time around.
Torrid Holdings Inc. CURV is set to release quarterly numbers on Dec 3. It has an Earnings ESP of +23.08% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CURV’s to-be-reported quarter’s EPS and revenues is pegged at 3 cents per share and $282.8 million, respectively. Shares of CURV have gained 2.1% in the past year.
Rubrik, Inc. RBRK presently has an Earnings ESP of +0.42% and a Zacks Rank #2. RBRK is scheduled to report quarterly numbers on Dec. 5. The Zacks Consensus Estimate for Rubrik’s to-be-reported quarter’s bottom line is pegged at a loss of 40 cents per share. The same for revenues is pegged at $217.6 million, respectively. Shares of RBRK have gained 32.7% in the past year.
Casey's General Stores, Inc. CASY has an Earnings ESP of +5.22% and a Zacks Rank #2 at present. CASY is scheduled to report quarterly figures on Dec. 9. The Zacks Consensus Estimate for CASY’s to-be-reported quarter’s earnings and revenues is pegged at $4.28 per share and $4.05 billion, respectively. Shares of CASY have increased 46.3% in the past year.
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