Stock to Track: Woodward, Inc. (NASDAQ: WWD)

On Wednesday, Shares of Woodward, Inc. (NASDAQ: WWD) fell -3.24% to $72.48. The stock recorded $72.23 as its minimum price and hit the max level of $75.45, during its most recent trading session. It traded total volume of 384,033 shares higher than the average volume of 375.97K shares.

Woodward, Inc. (WWD) recently stated financial results for its first quarter of fiscal year 2018 ending December 31, 2017.

First Quarter Fiscal 2018 Overview:

  • Net sales for the first quarter of fiscal 2018 were $470.0M, contrast to $443.0M for the first quarter of last year, a boost of 6 percent from the first quarter of fiscal 2017.
  • Net earnings for the first quarter of 2018 were $18.0M, or $0.29 per share, contrast to $47.0M, or $0.73 per share, in the first quarter of 2017. The effective tax rate for the first quarter of 2018 was 51.3 percent, contrast to 1.1 percent in the first quarter of the prior year. The first quarter of the current year reflects a one-time expense of about $15.0M, or $0.24 per share, as a result of the new U.S. tax legislation.
  • Total EBIT for the first quarter of 2018 was $44.0M, contrast to $53.0M in the first quarter of the prior year.
  • Net cash used in operating activities for the first quarter of 2018 was $30M, contrast to cash generated of $52.0M for the prior year. Free cash flow1 was an outflow of $31.0M for the first quarter of 2018, contrast to an inflow of $31.0M for the same period of the prior year.

Company Results:

Net sales for the first quarter of fiscal 2018 were $470.0M, contrast to $443.0M for the first quarter of fiscal 2017.

The effective tax rate for the first quarter of 2018 was 51.3 percent, contrast to 1.1 percent for the first quarter of 2017. The 2018 first quarter tax rate reflected additional tax expense of about $15.0M, or $0.24 per share, because of the recent U.S. tax legislation. The 2017 first quarter tax rate reflected the favorable impact of repatriating certain foreign earnings. Our full fiscal year 2018 tax rate is now anticipated to be about 24 percent. Beyond 2018, we anticipate our effective tax rate to be about 22 percent as a result of the new U.S. tax legislation.

Net earnings for the first quarter of 2018 were $18.0M, or $0.29 per share, contrast to $47.0M, or $0.73 per share, in the first quarter of 2017. EBIT was $44.0M for the first quarter of 2018, contrast to $53.0M for the first quarter of 2017. Moreover the tax impact on net earnings of the new legislation, net earnings and EBIT were unfavorably influenced in the first quarter of 2018 by increased investment in research and development, Moreover the timing of stock compensation expense.

Segment Results:

Aerospace:
Aerospace segment net sales for the first quarter of fiscal 2018 were $306.0M, contrast to $267.0M for the first quarter a year ago. Segment earnings for the first quarter of 2018 were $44.0M, contrast to $47.0M for the same quarter last year. Segment earnings as a percent of segment net sales were 14.2 percent this quarter, contrast to 17.6 percent in the same quarter of the prior year.

Industrial:
Industrial segment net sales for the first quarter of fiscal 2018 were $164.0M, contrast to $176.0M for the first quarter a year ago. Segment earnings for the first quarter of 2018 were $19.0M, contrast to $18.0M in the first quarter a year ago. Segment earnings as a percent of segment net sales were 11.8 percent in the first quarter of 2018, contrast to 10.2 percent in the same quarter of the prior year.

Nonsegment:
Nonsegment expenses totaled $19.0M for the first quarter of fiscal 2018, contrast to $11.0M for the same quarter last year. The increase in nonsegment expenses was because of the timing of the recording of the majority of stock-based compensation expense in the first quarter of 2018, whereas in the prior year this expense was recorded in the second quarter.

Cash Flow and Financial Position:

Net cash used in operating activities for the first quarter of fiscal 2018 was $3.0M, contrast to cash generated of $52.0M for the prior year. This difference was mostly a result of quarterly variability related to working capital. Free cash flow was an outflow of $31.0M for the first quarter of 2018, contrast to an inflow of $31.0M for the same period of the prior year. Payments for property, plant, and equipment for the first quarter of 2018 were $28.0M, contrast to $21.0M for the first quarter of 2017. For the full year, we now anticipate free cash flow to be about $230.0M, which reflects the positive impacts of the U.S. tax legislation changes, partially offset by higher working capital.

Total debt was $650.0M at December 31, 2017, contrasts to $613.0M at September 30, 2017.  The ratio of debt-to-debt-plus-equity was 31.7 percent at December 31, 2017, contrast to 30.9 percent at September 30, 2017.

Outlook:

For fiscal year 2018, net sales are still expected to be between $2.20B to $2.30B. Earnings per share are now expected to be between $3.35 and $3.60, reflecting the anticipated effects of the change in U.S. tax legislation.

WWD has the market capitalization of $4.52B and its EPS growth ratio for the past five years was 9.40%. The return on assets ratio of the Company was 7.60% while its return on investment ratio stands at 11.00%. Price to sales ratio was 2.15 while 76.00% of the stock was owned by institutional investors.

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Hot Stocks Point Staff

Hot Stocks Point Staff includes Robert Ebelling, Rene P. Todd, Robert McCormick, Patricia Myles and Frank Redding.Hot Stocks Point Staff believes that there are emerging and growing companies across various industry sectors with sizeable hidden value. Market disruptive discovery and innovation often occurs in small to mid-size companies that are either misunderstood or underrepresented. So they focus on identifying these companies and uncovering their stories before the rest of the market to ensure that you receive the full story – every single day.

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