5 Insightful Analyst Questions From Woodward's Q2 Earnings Call

Woodward’s second quarter results reflected strong momentum in its core Aerospace segment, with management citing robust aftermarket demand, continued growth in smart defense programs, and disciplined execution across the business. CEO Chip Blankenship highlighted that aftermarket service activity for newer engine platforms like LEAP and GTF is now approaching legacy volumes, which has meaningfully boosted Aero services revenue. In the Industrial segment, ongoing strength in gas turbine and marine applications offset anticipated declines in China on-highway truck demand, while operational improvements drove core margin expansion. Blankenship emphasized, “LEAP and GTF revenue is now approaching that of legacy products and is delivering a meaningful impact to our Aero services growth profile.”

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While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Woodward’s Q2 Earnings Call

• David Egon Strauss (Barclays) asked about the trajectory of LEAP and GTF aftermarket volumes compared to legacy engines. CEO Charles Blankenship clarified that aftermarket volumes are now in the same range as legacy engines, with crossover expected around 2028.

• Scott Deuschle (Deutsche Bank) questioned the sequential margin decline in Aerospace and the outlook for future improvement. CFO Bill Lacey explained that the margin mix was impacted by strong growth in lower-margin defense OEM, but expects margins to improve as pricing actions take effect.

• Noah Poponak (Goldman Sachs) pressed for detail on higher capital expenditures and working capital deployment. Lacey specified that increased investment supports both current programs and the new A350 win, aiming to balance growth with improved supply chain reliability.

• Scott Mikus (Melius Research) inquired about the significance of the A350 spoiler actuator win and whether it signals more Tier 1 opportunities. Blankenship responded that such displacements are rare but this win, alongside the Safran acquisition, positions Woodward well for future Airbus content.

• Christopher Glynn (Oppenheimer) asked about marine market gains and whether Woodward is taking share. Blankenship attributed growth to winning positions on major platforms, higher shipyard orders, and strong services demand.

Catalysts in Upcoming Quarters

In the coming quarters, our analysts will be watching (1) the ramp-up of the Airbus A350 spoiler actuator program and progress on the new U.S. manufacturing facility, (2) the pace of integration and operational improvements from the Safran electromechanical acquisition, and (3) sustained aftermarket demand for both legacy and LEAP/GTF engine platforms. Execution on capital allocation and managing inflationary headwinds will also be key signposts for Woodward’s performance trajectory.

Woodward currently trades at $252.99, down from $258.50 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).

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