Woodward, Inc. (WWD) delivered a strong third-quarter earnings beat alongside higher fiscal 2026 guidance, signaling broad demand strength across both its Aerospace and Industrial segments.
Adjusted earnings jumped 43.2% year over year to $2.52 per share, topping the Zacks Consensus Estimate by 5.4% and underscoring the company’s operational momentum heading into the final quarter.
Sales climbed 21.2% to $1.11 billion, driven by higher volume and pricing that pushed adjusted EBITDA up 50% to $249 million for the quarter.
Management raised adjusted earnings guidance to a range of $9.30 to $9.50 per share, compared with the prior range of $9.15 to $9.45, while retaining its 20% to 23% sales-growth outlook.
The company also maintained its free-cash-flow forecast of $300 to $350 million, suggesting confidence that near-term demand trends will hold through fiscal year-end.
Aerospace sales grew 19% in the quarter, with commercial original equipment manufacturer sales advancing 34%, commercial services rising 24%, and defense services increasing 20%.
Industrial sales climbed 26% on strength in marine transportation, data-center power, and oil and gas demand, with several power-generation customers already raising forecasts well into the early 2030s.
Aerospace margin reached 24%, though a retroactive contract pricing adjustment contributed roughly 100 basis points, while China on-highway operations added approximately 90 basis points to Industrial’s 22.1% margin.
Companywide pricing is expected to normalize to 3% to 5% after reaching approximately 8% for fiscal 2026, meaning future margin progress will depend more heavily on volume, mix, lean manufacturing, and automation.
The Glatten expansion increased high-speed fuel-injection capacity by 50% and is already supporting power-generation demand, having been completed on schedule and on budget without disrupting deliveries.
The Spartanburg facility is expected to become operational in 2027, with product deliveries beginning the following year, alongside licensed LEAP repair partnerships intended to broaden aftermarket coverage.
China on-highway operations generated $40 million in third-quarter sales, but Woodward expects little fourth-quarter revenue from the segment as its exit is completed, creating a harder Industrial comparison heading into fiscal 2027.
Free cash flow fell 12% to $87 million as capital expenditures more than doubled, with higher inventory, receivables, and spending tied to the roughly $290 million full-year capital plan pressuring cash conversion.
Moog Inc. (MOG-A) serves as a relevant peer supplying precision flight and engine controls, while RTX Corporation (RTX) provides another industry reference through aircraft systems, engines, and aftermarket support across commercial and defense markets.
WWD currently carries a Zacks Rank of 3, or Hold, with a Growth Score of B and a Momentum Score of A, though a Value Score of D and a mixed VGM Score of C support a measured rather than outright bullish stance on the stock.
