Woodward, Inc. Reports 5.8% Revenue Growth in Q2 Fiscal Year 2025

Woodward, Inc. reported a solid financial performance for the second quarter of fiscal year 2025, with net sales reaching $883.6 million, a 5.8% increase from $835.3 million in the same period last year. For the first half of the fiscal year, total revenues amounted to $1.66 billion, up 2.1% from $1.62 billion in the prior year. The company's net earnings for the quarter were $108.9 million, translating to diluted earnings per share of $1.78, compared to $97.6 million and $1.56 per share in the previous year. Year-to-date net earnings also saw an increase, totaling $196 million, up from $187.6 million.

The financial results reflect significant changes in both the Aerospace and Industrial segments. The Aerospace segment reported net sales of $561.7 million for the quarter, a 12.9% increase from $497.5 million, driven by price realization and volume growth. In contrast, the Industrial segment experienced a decline in sales, reporting $321.9 million, down 4.7% from $337.8 million, primarily due to lower demand in the China on-highway natural gas truck market. The overall gross margin for the quarter was 27.2%, slightly down from 28.1% in the previous year, attributed to unfavorable product mix and inflationary pressures on material and labor costs.

Strategically, Woodward is actively pursuing growth through acquisitions and divestitures. The company announced plans to acquire the Safran Electronics & Defense electromechanical actuation business, which is expected to close in the second half of fiscal year 2025. Additionally, Woodward divested certain product lines, including its heavy-duty gas turbine combustion parts product line, generating cash proceeds of $44.9 million and a pretax gain of $20.5 million. These strategic moves are part of Woodward's ongoing efforts to optimize its product portfolio and enhance operational efficiency.

Operationally, Woodward's total assets increased to $4.49 billion as of March 31, 2025, compared to $4.37 billion at the end of the previous fiscal year. The company reported a cash and cash equivalents balance of $364.1 million, up from $282.3 million, and total debt of $911.9 million. The company’s effective tax rate for the quarter was 18.1%, down from 19.1% in the prior year, reflecting a favorable shift in projected future withholding taxes on unremitted foreign earnings.

Looking ahead, Woodward anticipates continued challenges in the Industrial segment, particularly in the China on-highway natural gas truck business, where demand remains uncertain. However, the company expects to benefit from ongoing growth in the Aerospace segment as production ramps up. Management remains focused on leveraging its operational strengths and strategic initiatives to drive future growth and enhance shareholder value.