Key Points
Woodward reported a strong Q1 with net sales of $996 million (+29% YoY), EPS of $2.17, and $70 million of free cash flow, and it raised fiscal 2026 sales guidance to consolidated growth of 14%–18% and EPS to $8.20–$8.60 while keeping free cash flow guidance at $300–$350 million.
The aerospace segment drove outperformance—sales rose to $635 million (+29%) and margins expanded 420 bps to 23.4% thanks to stronger commercial services, price realization and higher spare LRU volumes, though management warned those tailwinds may not repeat.
Industrial sales grew to $362 million (+30%), but Woodward will wind down the volatile China On‑Highway lines by end of fiscal 2026 (expecting $20–25 million of restructuring costs and ~$60 million of China sales in FY26), and the company still faces supply‑chain constraints and elevated inventory while investing to expand capacity.
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Woodward: Delivering Critical Components for the Aerospace Boom
Woodward (NASDAQ:WWD) reported a strong start to fiscal 2026, with management citing robust demand across both its aerospace and industrial segments and improved execution as key drivers of first-quarter outperformance. Chairman and CEO Chip Blankenship said the company is focused on increasing output to meet rising demand while continuing to work through ongoing supply chain alignment challenges that have kept inventory levels elevated.
First-quarter results reflect strong demand and execution
Chief Financial Officer Bill Lacey said first-quarter fiscal 2026 net sales rose 29% year-over-year to $996 million. Earnings per share were $2.17, compared with $1.42 in the prior-year quarter. Woodward generated $70 million of free cash flow in the quarter, which Lacey said was stronger than the company’s historical first-quarter performance.
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Management attributed the quarter’s outperformance primarily to strong aerospace commercial services and higher-than-planned China On-Highway revenue in the industrial segment. Lacey added that Woodward did not experience its typical seasonal demand drop-off and maintained steady production levels despite fewer working days.
Aerospace: services strength and margin expansion
Aerospace segment sales increased 29% to $635 million. Lacey said the growth was driven primarily by commercial services, which increased 50% due to higher volumes supporting sustained high utilization of legacy aircraft and increased LEAP and GTF activity. Woodward also saw significantly higher Spare LRU volumes during the quarter, primarily for China, which management said appeared to be driven by customer under-provisioning rather than pull-forward demand.