Woodward (WWD) Up 7.7% Since Last Earnings Report: Can It Continue?

It has been about a month since the last earnings report for Woodward (WWD). Shares have added about 7.7% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Woodward due for a pullback? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent catalysts for Woodward, Inc. before we dive into how investors and analysts have reacted as of late.

Woodward's Q4 Earnings Surge 48% Y/Y

Woodward reported fourth-quarter fiscal 2025 adjusted net earnings per share (EPS) of $2.09, which jumped 48% year over year and beat the Zacks Consensus Estimate by 14.2%.

Quarterly net sales increased 16% year over year to $995 million. The upside is fueled by market tailwinds across Aerospace and Industrial. The top line beat the consensus estimate by 6.4%. For the full year, WWD reported net sales of $3.6 billion, increasing 7% year over year, and adjusted EPS surged 13% to $6.89.

During fiscal 2025, the company completed its acquisition of Safran’s North American Electromechanical Actuation business, adding leading Horizontal Stabilizer Trim Actuation technology and complementary products to its portfolio. It also launched a new three-year, $1.8 billion share repurchase program. Additionally, Airbus selected the company to supply 12 of the 14 spoiler actuation systems for the A350—its first primary flight control win on a commercial aircraft. It also broke ground on a highly automated, vertically integrated aerospace manufacturing facility in Spartanburg County, SC.  WWD also streamlined its Industrial portfolio by divesting its combustion product line, part of a broader strategy to concentrate on high-growth, high-margin verticals.

Segment Results

Aerospace: Net sales were $661 million, up 19.6% year over year, driven by broad-based strength across commercial services and defense OEM. Defense OEM and defense services sales were up 27% and 80%, respectively, year over year. Commercial OEM sales were flat year over year, while services jumped 40%.

Segmental earnings were $162 million, up from $106 million a year ago. The gains were fueled by strong pricing and increased volume, though partly tempered by planned investments in Aerospace manufacturing and ongoing inflationary pressures. Margins expanded 540 basis points (bps) to 24.4%.

Industrial: Net sales totaled $334 million, up 10.6% year over year, driven by gains across power generation and oil & gas markets. Core industrial sales, excluding the China on-highway impact, rose 15%.

Transportation sales rose 15% and oil and gas sales increased 13%. Power generation grew a modest 6%, reflecting the sale of the combustion business in the second quarter, which previously contributed about $15 million per quarter. Without that divestiture, power generation sales would have grown in the mid-teens.

Segmental earnings were $49 million, up from $38 million in the year-ago quarter. In the core industrial segment, margins increased 330 bps to 15.2% of sales, led by strong pricing, though partially offset by anticipated inflation and ongoing strategic investments in manufacturing capacity.

Other Details

Gross margin was up 360 bps year over year to 27.9%.

Total costs and expenses were $835.5 million, up 11% year over year.

Adjusted EBITDA was $205 million compared with $147 million a year ago.

Cash Flow & Liquidity

As of Sept. 30, 2025, Woodward had $327.4 million in cash and cash equivalents with $457 million of long-term debt (less the current portion).

For the fiscal year ended Sept. 30, 2025, WWD generated $471 million of net cash from operating activities, increasing from $439 million reported in the prior-year period.

Adjusted free cash flow was $340 million compared with $343 million in fiscal 2024. The decrease in free cash flow was mainly driven by increased capital spending, though higher earnings helped offset part of the impact. Capital expenditures reached $131 million in fiscal 2025, up from $96 million, reflecting continued investment in automation and production capabilities to enhance operations and support future growth.

During fiscal 2025, WWD returned $238 million to its shareholders in the form of $65 million of dividends and $173 million of share repurchases.

Fiscal 2026 Guidance

Management expects strong demand to continue into fiscal 2026, with momentum in both the Aerospace and Industrial segments. Woodward expects consolidated net sales to rise 7% to 12%, with Aerospace projected to grow 9% to 15% and Industrial anticipated to increase 5% to 9%.

Management expects revenues from China's on-highway natural gas trucks to be $60 million for the year, on par with 2025. Aerospace segment earnings are expected to be 22% to 23% of segment sales. Industrial segment earnings are expected to be 14.5% to 15.5% of segment sales.

Adjusted free cash flow is anticipated to be between $300 million and $350 million, while EPS is expected to be between $7.5 and $8.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month.

The consensus estimate has shifted 6.17% due to these changes.

VGM Scores

Currently, Woodward has a great Growth Score of A, a score with the same score on the momentum front. However, the stock has a score of D on the value side, putting it in the bottom 40% for value investors.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Woodward has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

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This article originally published on Zacks Investment Research (zacks.com).

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