Woodward to Report Q1 Earnings: Here's What Investors Should Know

Woodward, Inc WWD is scheduled to report first-quarter fiscal 2026 results on Feb. 2.

The Zacks Consensus Estimate for revenues is pegged at $891.3 million, which implies an increase of 15.4% from the year-ago reported number. The consensus mark for earnings is pegged at $1.63 per share, indicating a year-over-year increase of 20.7%.

WWD’s earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 14.66%. Woodward’s shares have gained 75.3% compared with the Aerospace Defense Equipment industry’s growth of 43.8% in the past year.

Factors to Note Ahead of WWD’s Q1 Results

WWD’s performance in the fiscal first quarter is likely to have been powered by growth in the Aerospace segment, indicating its strategic positioning coupled with operational excellence.

High aircraft utilization and solid defense activity remain key tailwinds. Defense services sales have been benefiting from a strong demand environment and steady operations. Defense OEM sales are likely to have been driven by price tailwinds and increasing smart defense order activity. 

Heading into 2026, management expects Commercial OEM to gain as Boeing disruptions fade, as airframer production rates increase. Also, it noted that Commercial Services revenue growth is expected to moderate year over year in 2026 due to tougher comparisons. 

Within the Industrial segment, Power Generation growth is expected to be muted in the first half of fiscal 2026, due to the sale of the combustion product line. Increasing demand for power generation and the continued requirement for backup power for data centers and power demand to support grid stability remain tailwinds for this segment. 

Woodward, Inc. Price and EPS Surprise

Woodward, Inc. price-eps-surprise | Woodward, Inc. Quote

Increasing demand for alternative fuels across the marine industry, as well as momentum in the global marine market brought on by higher utilization, bodes well. Within oil and gas, an encouraging investment outlook in China, the Middle East and India’s refining and petrochemical activities are likely to have acted as another tailwind. 

Global macroeconomic weakness and rising costs continue to be concerns. Also, slowdown in production within the oil and gas sector and supply-chain challenges in the Aerospace segment remain concerns. 

We expect revenues from the Aerospace segment to be up 19.7% to $591.2 million and the Industrial segment to increase 11.1% to $309.7 million for the fiscal first quarter.

Recent Developments

On Jan. 15, 2026, Woodward announced plans to wind down its on-highway natural gas truck business in China (China OH) as part of a broader effort to better focus on the Industrial segment and streamline the product portfolio. 

The wind-down will include the closure of a small manufacturing facility in China dedicated to the China OH business, as well as reductions in a limited number of sales, engineering and product support roles. These actions are confined solely to the China OH business. Management highlighted that exiting the China OH business is a strategic move to better align its Industrial portfolio with priority end markets and long-term growth opportunities.

China OH business has not been a material or consistent contributor to Woodward’s overall financial performance. In fact, it has been a persistent drag on the company’s performance. In fiscal 2025, the Industrial segment’s earnings were $183 million, down from $230 million in the prior year. The decline was primarily due to lower volumes and an unfavorable sales mix stemming from reduced China on-highway demand. On the last earnings call, management stated that revenues from China OH business are expected to be $60 million for fiscal 2026, on par with fiscal 2025.

What Our Model Says for WWD

Our proven model predicts 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 exactly the case here.

WWD has an Earnings ESP of +4.41% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks to Consider

Here are three other stocks you may want to consider, as our model shows that these, too, have the right elements to post an earnings beat in this reporting cycle.

Cirrus Logic, Inc CRUS currently has an Earnings ESP of +5.9% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here. 

CRUS is scheduled to report quarterly earnings on Feb. 3. The Zacks Consensus Estimate for CRUS’ to-be-reported quarter’s earnings and revenues is pegged at $2.42 per share and $536.3 million, respectively. Shares of CRUS have gained 31.6% in the past year.

NXP Semiconductors N.V. NXPI presently has an Earnings ESP of +0.19% and a Zacks Rank #2. NXPI is scheduled to report quarterly numbers on Feb. 2. The Zacks Consensus Estimate for NXPI’s to-be-reported quarter’s earnings and revenues is pegged at $3.30 per share and $3.3 billion, respectively. Shares of NXPI have risen 13.5% in the past year.

Advanced Micro Devices, Inc. AMD has an Earnings ESP of +2.01% and a Zacks Rank #2 at present. AMD is scheduled to report quarterly figures on Feb. 3. The Zacks Consensus Estimate for AMD’s to-be-reported quarter’s earnings and revenues is pegged at $1.32 per share and $9.67 billion, respectively. Shares of AMD have skyrocketed 112.6% in the past year.
 

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

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