Q4 Earnings Preview for Woodward (WWD)


Woodward, Inc. (NASDAQGS:WWD) is scheduled to report Q4 earnings results on November 5, 2019. The company is expected to report earnings of $1.23/share on revenue of $745 million. The consensus earnings per share (EPS) of $1.23/share is based on a poll of 8 analysts and represents a decline of -11.2% over the same quarter last year when the company reported earnings of $1.39/share.

The revenue forecast of $745 million based on a poll of 8 analysts implies a year-over-year (YoY) growth of 3.6%. Last year the company reported $719.4 million in revenue for the quarter.

Expected to report EPS decline of -$0.16/share for Q4, 2019
Metric Expected Prior Year YoY Change
Revenue $745.00 $719.36 3.6%
EPS $1.23 $1.39 -11.2%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and missed expectations 1 quarter. The company has also delivered strong revenue growth in recent years:

Woodward Revenues.jpg

What are your expectations from Woodward for this earnings this quarter? Let us know in the comments!

Analyst Expected vs Reported EPS
Quarter Expected Reported Surprise Result
Q3, 2019 $1.17 $1.30 11.1% Beat
Q2, 2019 $1.06 $1.40 32.1% Beat
Q1, 2019 $0.75 $0.96 28.0% Beat
Q4, 2018 $1.33 $1.39 4.5% Beat
Q3, 2018 $1.04 $1.12 7.7% Beat
Q2, 2018 $0.81 $0.82 1.2% Beat
Q1, 2018 $0.61 $0.53 -13.1% Missed
Q4, 2017 $0.94 $0.98 4.8% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2019, the stock price reacted by falling by -4.3%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
2019-08-05 $109.84 $105.15 -4.3% Decline
2019-04-29 $102.73 $108.90 6.0% Increase
2019-01-28 $77.75 $86.78 11.6% Increase
2018-11-07 $78.11 $84.04 7.6% Increase

Management’s most recent investor presentation can be found here: Investor Presentation

Fundamentals And Technical Analysis

Woodward is currently trading at $113.90/share, down 0.7% for the day. The company is trading at around 95% of its 52-week high of $119.20/share. The company’s stock price is up 8% since the last earnings report and up 2.6% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 68.45 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.

The current share price implies a price-to-earnings (P/E) multiple of 26.4x and a forward P/E multiple of 22.7x. Woodward’s current share price also implies a price-to-book (P/B) multiple of 4.1x. The following table summarizes some other key fundamental ratios:

Data as of November 17, 2019
Metric Value
Last Fiscal Period FY2019.Q3
Period End Date June 30, 2019
Stock Price (Current) $114.74
P/E Ratio 26.4x
P/E Ratio (Fwd) 22.7x
PEG Ratio 1.7
Total Debt to Capital (%) 14.5%
Levered Free Cash Flow $241 million
Enterprise Value / EBITDA 15.6x

Company Profile: Woodward, Inc.

Woodward, Inc. is a mid-cap stock with a market capitalization of $7.096 billion and a total enterprise value of $8.228 billion. The company operates in the Industrials sector and Machinery industry.

Woodward, Inc. designs, manufactures, and services control solutions for the aerospace and industrial markets worldwide. The company’s Aerospace segment offers fuel pumps, metering units, actuators, air valves, specialty valves, fuel nozzles, and thrust reverser actuation systems for turbine engines and nacelles; and flight deck controls, actuators, servo controls, motors, and sensors for aircraft that are used on commercial and private aircraft and rotorcraft, as well as on military fixed-wing aircraft and rotorcraft, guided weapons, and other defense systems.

The company also provides aftermarket maintenance, repair, overhaul, and other services to commercial airlines, repair facilities, military depots, third party repair shops, and other end users. This segment sells its products to original equipment manufacturers (OEMs), tier-one suppliers, and various contractors, as well as through aftermarket sales of components, such as provisioning spares or replacements, and spare parts.

Its Industrial segment designs and produces systems and products for the management of fuel, air, fluids, gases, motion, combustion, and electricity. Its products include actuators, valves, pumps, fuel injection systems, solenoids, ignition systems, speed controls, electronics and software, power converters, sensors, and other devices that measure, communicate, and protect electrical distribution systems for use in industrial gas turbines, steam turbines, reciprocating engines, electric power generation and power distribution systems, wind turbines, and compressors. This segment sells its products, aftermarket products, and other related services to OEMs through an independent network of distributors, as well as directly to end-users.

The company was founded in 1870 and is headquartered in Fort Collins, Colorado.

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