WWD

It has been about a month since the last earnings report for Woodward (WWD). Shares have lost about 2.8% in that time frame, underperforming the S&P 500. But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Woodward due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts. WWD Q3 Earnings Beat on Aerospace and Industrial Strength Woodward reported third-quarter fiscal 2026 adjusted earnings of $2.52 per share, up 43.2% year over year. The bottom line beat the Zacks Consensus Estimate of $2.39 by 5.4%. Net sales rose 21.2% to $1.11 billion but missed the consensus mark of $1.114 billion by 0.4%. Commercial OEM sales surged 34%, while demand remained broad across Woodward's Industrial markets. Aerospace Sales Accelerate Aerospace sales increased 19% to $709 million. Commercial OEM revenues reached $234 million as aircraft production rates increased, while commercial services generated $268 million on continued legacy aircraft servicing and growing LEAP and GTF activity. Management said service inputs remained steady to higher across newer engine platforms. Defense OEM sales declined 6% to $141 million because of a one-time revenue recognition adjustment. Excluding that item, sales would have grown in the mid-single digits. Defense services rose 20% to $66 million. Segment earnings advanced 35% to $170 million, and margin expanded 290 basis points (bps) to 24%. A retroactive contract pricing adjustment added about 100 bps to the margin. Industrial Growth Broadens Industrial sales climbed 26% to $401 million. Transportation revenues increased 40% to $180 million, aided by strong marine demand and $40 million of China on-highway sales. Power generation rose 19% to $145 million on robust data-center demand for prime and backup power. Oil and gas revenues advanced 11% to $76 million, supported by liquefied natural gas infrastructure activity and improving upstream capital spending.Industrial earnings jumped 86% to $88 million, while margin expanded 720 bps to 22.1%. China on-highway contributed about 90 bps to the margin. Core Industrial sales, which exclude that business, grew 19% to $361 million. Pricing and Productivity Support Profits Adjusted EBITDA increased 50% to $249 million, while adjusted EBIT rose 58% to $217 million. Total costs and expenses were $916.2 million compared with $788.6 million a year earlier. Profitability benefited from higher volume and pricing, partly offset by inflation, unfavorable mix and a higher tax burden. The adjusted effective tax rate rose to 24.2% from 14.5%. Companywide price realization was 10% in the quarter. Management expects full-year pricing of about 8%, with a more normal 3-5% range going forward. Lean initiatives are beginning to improve factory productivity. Automation across machining, inspection and material handling is intended to reduce the need for roughly 1,000 incremental hires by 2029. Cash Flow Funds Capacity Expansion Net cash provided by operating activities increased 17% to $147 million. Free cash flow declined 12% to $87 million as capital expenditures more than doubled to $60 million. Management expects spending to rise sharply in the fourth quarter, mainly to finish the Spartanburg facility and purchase equipment for the A350 spoiler program. Woodward ended June with $475 million in cash and cash equivalents and $1.34 billion of total debt. EBITDA leverage was 1.6 times. Through nine months, operating cash flow reached $352 million and free cash flow totaled $196 million. The company returned $608 million to shareholders, including $553 million through repurchases and $55 million through dividends. Fiscal 2026 Outlook WWD raised its fiscal 2026 adjusted earnings guidance to $9.30-$9.50 per share from $9.15-$9.45. The company maintained its sales growth outlook of 20-23%, free cash flow forecast of $300-$350 million and capital expenditure plan of approximately $290 million. It expects to return about $700 million to shareholders for the full year. Aerospace sales are now expected to grow 21-23%, with a segment margin of about 23.5%. Industrial sales growth is projected at 19-21%, up from 18-20%, while segment margin is expected to reach roughly 19%. The adjusted effective tax rate forecast increased to approximately 22.5%. In the past month, investors have witnessed a upward trend in estimates review. At this time, Woodward has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for value investors. Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Woodward has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Woodward, Inc. (WWD) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at aerospace stocks, starting with Woodward (NASDAQ:WWD). Aerospace companies often possess technical expertise and have made significant capital investments to produce complex products. It is an industry where innovation is important, and lately, emissions and automation are in focus, so companies that boast advances in these areas can take market share. On the other hand, demand for aerospace products can ebb and flow with economic cycles and geopolitical tensions, which can be particularly painful for companies with high fixed costs. The 14 aerospace stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 1.7% while next quarter’s revenue guidance was 5.5% above. In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results. Initially designing controls for water wheels in the early 1900s, Woodward (NASDAQ:WWD) designs, services, and manufactures energy control products and optimization solutions. Woodward reported revenues of $1.11 billion, up 21.2% year on year. This print was in line with analysts’ expectations, and overall, it was a strong quarter for the company with a solid beat of analysts’ EBITDA and EPS estimates. “We delivered outstanding third quarter results, including significant sales growth and margin expansion in both segments,” said Chip Blankenship, Chairman and Chief Executive Officer. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 6.6% since reporting and currently trades at $359.89. Read why we think that Woodward is one of the best aerospace stocks, our full report is free. Integrating power outlets into many Boeing aircraft, Astronics (NASDAQ:ATRO) is a provider of technologies and services to the global aerospace, defense, and electronics industries. Astronics reported revenues of $260 million, up 27% year on year, outperforming analysts’ expectations by 6%. The business had a stunning quarter with a solid beat of analysts’ EBITDA estimates and full-year revenue guidance exceeding analysts’ expectations. Astronics scored the highest full-year guidance raise of the whole group. The market seems happy with the results as the stock is up 9.5% since reporting. It currently trades at $82.00. Is now the time to buy Astronics? Access our full analysis of the earnings results here, it’s free. Providing a one-stop shop that integrates multiple services and product offerings, AerSale (NASDAQ:ASLE) delivers full-service support to mid-life commercial aircraft. AerSale reported revenues of $70.93 million, down 33.9% year on year, falling short of analysts’ expectations by 12.7%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates. AerSale delivered the weakest performance against analyst estimates and slowest revenue growth among its peers. As expected, the stock is down 8.4% since the results and currently trades at $5.77. Read our full analysis of AerSale’s results here. Based in Jacksonville, Florida, Redwire (NYSE:RDW) is a provider of systems and components used in space infrastructure. Redwire reported revenues of $117.1 million, up 89.6% year on year. This print topped analysts’ expectations by 8.7%. It was a strong quarter as it also produced a solid beat of analysts’ EBITDA estimates and full-year revenue guidance slightly topping analysts’ expectations. Redwire scored the biggest analyst estimate beat and fastest revenue growth in the group. The stock is up 16.2% since reporting and currently trades at $12.46. Read our full, actionable report on Redwire here, it’s free. Founded shortly after World War II by a group of engineers from UC Berkley, Hexcel (NYSE:HXL) manufactures lightweight composite materials primarily for the aerospace and defense sectors. Hexcel reported revenues of $529.3 million, up 8% year on year. This result was in line with analysts’ expectations. Overall, it was a strong quarter as it also recorded full-year EPS guidance exceeding analysts’ expectations and a beat of analysts’ EPS estimates. Hexcel had the weakest full-year guidance update of the whole group. The stock is down 5.3% since reporting and currently trades at $100.01. Read our full, actionable report on Hexcel here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

Image source: The Motley Fool. Wednesday, July 29, 2026 at 5:00 p.m. ET Chairman and Chief Executive Officer - Charles Blankenship Chief Financial Officer - William Lacey Director of Investor Relations - Daniel Provaznik Operator: Thank you for standing by. Welcome to the Woodward, Inc. Third Quarter Fiscal Year 2026 Earnings Call. At this time, I would like to inform you that this call is being recorded for rebroadcast. Joining us today from the company are Chip Blankenship, Chairman and Chief Executive Officer; Bill Lacey, Chief Financial Officer; and Daniel Provaznik, Director of Investor Relations. I would now like to turn the call over to Dan Provaznik. Daniel Provaznik: Thank you, operator. We would like to welcome all of you to Woodward's Third Quarter Fiscal Year 2026 Earnings Call. In today's call, Chip will comment on our strategies and related markets. Bill will then discuss our financial results as outlined in our earnings release. At the end of the presentation, we will take questions. For those who have not seen today's earnings release and presentation materials, you can find them on our website at woodward.com. A webcast of this call will be available on our website for 1 year. All references to years in this call are references to the company's fiscal year unless otherwise stated, and all comparisons are to the prior year unless otherwise stated. I would like to highlight our cautionary statement as shown on Slide 2 of the presentation materials. As always, elements of this presentation are forward looking, including our guidance and are based on our current outlook and assumptions for the global economy and our businesses more specifically. Those elements can and do frequently change. Our forward-looking statements are subject to a number of risks and uncertainties surrounding those elements including the risks we identify in our filings with the SEC. These statements are made as of today, and we do not intend to update them except as required by law. In addition, we are providing certain non-U.S. GAAP financial measures. We direct your attention to the reconciliations of non-U.S. GAAP financial measures, which are included in today's slide presentation and our earnings release. We believe this additional financial information will help in understanding our results. Now I'll turn the call over to Chip. Charles Blankenship: Thank you, Dan, and good evening to everyone joining us for our third quarter 2026 earnings call. I'm pleased to report that Woodward delivered another outstanding quarter, marked by strong financial and operational performance. This continued momentum is the result of focused and disciplined execution by our global team as we deliver on strong customer demand for our products and services across our aerospace and industrial markets. In the quarter, Woodward sales grew 21% year-over-year and adjusted EPS increased 43%. We delivered significant margin expansion, primarily driven by pricing actions. We are also seeing productivity gains from our lean transformation start to flow through our factories and improve margins. Industrial sales were up 26% in the quarter, and the team did an excellent job leveraging fixed costs as volume increased across all primary markets. Aerospace sales were up 19% with commercial OEM keeping pace with airframer build rates, sustained commercial services growth and strength in defense services. As we move through the final quarter of the year, we are well positioned to deliver on anticipated growth across our markets. The growth trajectory in Aerospace was reinforced last week at the Farnborough Airshow. In the many years I've attended the show, I can't remember another time when the industry remained so calm and collected during a period of such significant growth for current generation products and services. Several big aircraft orders were announced at the show. Commercial OEM and services outlooks are strong, and there is a sense that defense demand could also accelerate. All of this was taken in stride as airframers and engine OEMs look to component and service providers like Woodward to maintain focus and deliver on the demand created by the growing backlog. In this high-growth environment, it is helpful that supply chain visibility and predictability continue to improve. Disruptions haven't totally gone away, but we are working together with our suppliers and customers to manage through them. During Airshow Week, we announced a partnership with HAECO, establishing the third elite license service facility for Woodward LRUs on the CFM LEAP engine. This is an important step for our airline customers throughout Greater China and the Asia Pacific region. Our services capacity strategy is well defined for the next several years, and we're now focused on executing that strategy to stay ahead of growing customer demand. On the topic of capacity, we celebrated the recent completion of the expansion of our Industrial segment high-speed fuel injection value stream in Glatten, Germany. The expanded production capacity is already supporting growing demand, particularly from Rolls-Royce's mtu Solutions division serving power generation applications. I enjoyed being in Glatten with customers, community partners and our amazing team members who completed this complex project on schedule, on budget and without disrupting customer deliveries. It's a great example of how we're expanding capacity while maintaining the operational discipline our customers expect. We've also announced additional footprint optimization decisions to support future growth and improve efficiency. This includes the decision to close our recently acquired electronic products facility in Canada and transfer production and engineering to existing Woodward facilities in Poland and Bulgaria. We're working through the transition and being thoughtful and respectful with our members. This move will generate meaningful cost synergies while improving the returns on our THSA and related electromechanical product portfolio acquisition. We also decided to move one of our Niles JDAM production lines to our new Spartanburg facility to strengthen supply continuity for customers, provide flexibility and support future growth. Earlier, I mentioned that we're starting to see productivity gains flow through our factories. One area of significant progress is our automation journey. Those of you who visited our Rock Cut facility saw the deburring cobots in action. This technology has become a platform for us, and we are deploying it across Woodward plants. In another automation success story, we are working with a supplier to integrate machining, inspection, loading and unloading into a lights-out cell for key fuel nozzle parts. This will deliver capacity for our GTF high-volume line as well as efficiency and risk reduction. Our automation investment objectives are fourfold: expand capacity, increase productivity and enable growth as well as reduce our direct labor hiring demand. We are targeting a reduction of approximately 1,000 incremental hires by 2029, in many cases, by automating repetitive, less desirable work. This represents about 50% of our projected hiring needs in that time frame, equally weighted by attrition and growth. As with our lean transformation, this is not about replacing people. We will continue hiring to support growth and manage attrition. We'll just need fewer new hires, and we will gain long-term workforce efficiencies. Tying all this together from disciplined execution to investments in capacity and automated processes, we are on an exciting path for long-term growth and margin expansion. Based on a strong third quarter and confidence that we will continue to execute well in the fourth quarter, we are raising our earnings guidance for 2026. Now over to you, Bill. William Lacey: Thank you, and good evening, everyone. As Chip mentioned, Q3 was an outstanding quarter. We achieved record performance in a number of areas. Net sales were $1.1 billion, an increase of 21%, reflecting strong demand and increased output in both Aerospace and Industrial. We achieved earnings per share of $2.40 compared to $1.76. Adjusted earnings per share were slightly better at $2.52, also compared to $1.76. Free cash flow was $87 million, bringing our year-to-date total to $196 million for an increase of 23%. At the segment level, Aerospace sales for the third quarter were $709 million, an increase of 19%. The strong growth was primarily driven by commercial Aerospace. Commercial OEM sales increased 34% with our output generally aligned with steadily increasing airframer build rates. Commercial services increased 24%, reflecting continued strength across the business. This included high utilization of legacy aircraft, growing LEAP and GTF activity and solid service demand across wide-body and regional platforms. Defense OEM sales declined 6% due to a one-time revenue recognition adjustment. Excluding the adjustment, defense OEM sales would have grown in the mid-single digits. Defense Services grew 20%, driven by a large delivery of T700 spares and general improvements in castings supply. Aerospace segment earnings were $170 million or 24% of segment sales compared to $126 million or 21.1% of segment sales. The meaningful margin expansion was driven by strong price realization and increased leverage from higher sales volume, partially offset by inflation and unfavorable mix. Price realization included a one-time retroactive pricing adjustment related to a contract that had been under negotiation for several quarters. This adjustment contributed approximately 100 basis points to Aerospace margins in the third quarter. Turning to Industrial. Segment sales for the third quarter were $401 million, an increase of 26%. Core Industrial sales, which exclude the impact of China on-highway, increased 19%, driven by higher volume in all primary markets as well as price realization. Marine transportation sales were strong, increasing approximately 24% with higher shipyard output driving OEM demand. In addition, services also contributed to the growth. Oil and gas sales grew 11%, driven primarily by higher LNG infrastructure-related volume. In addition, upstream capital expenditures are showing signs of recovery, particularly in the Middle East. Power generation sales increased 19%, driven by higher data center demand for both base and backup power. Third quarter China on-highway sales were better than expected at $40 million. We do not expect significant China on-highway sales in the fourth quarter as we complete the wind down of this business. Industrial segment earnings were $88 million or 22.1% of segment sales compared to $48 million or 14.9% of segment sales. The strong margin expansion was driven by increased leverage from higher sales volume and price realization, partially offset by inflation. Core Industrial margins were 21.2% compared to 15.6%. The China on-highway business added approximately 90 basis points to segment margin in the quarter. At the consolidated Woodward level, for the first 9 months of 2026, net cash provided by operating activities was $352 million compared to $238 million, largely driven by higher earnings. For the first 9 months, free cash flow was $196 million, an increase of 23% over the prior year while increasing capital expenditures. Our capital expenditures totaled $156 million, and we expect a meaningful increase in capital spending in the fourth quarter. As we discussed last quarter, we are carrying higher inventory levels to support demand. In addition, our accounts receivable balance at the end of the third quarter was higher than expected due to collections timing. As of June 30, 2026, debt leverage was 1.6x EBITDA. Our strong balance sheet provides flexibility to act decisively as compelling opportunities emerge. Our capital allocation priorities remain unchanged. We continue to support organic growth, selectively pursue strategic M&A and return capital to shareholders. In the first 9 months of 2026, we returned $608 million to shareholders, $553 million through share repurchases and $55 million in dividends. We now expect to return approximately $700 million to shareholders through dividends and share repurchases in the fiscal year. Turning to our 2026 guidance. Based on our strong third quarter performance and confidence in the fourth quarter, we are raising our 2026 earnings guidance. For 2026, we now expect the following: Aerospace sales growth between 21% and 23% with margins of approximately 23.5%, the top end of our previous range. Industrial sales growth increasing to between 19% and 21%, with margins increasing to approximately 19%, and adjusted effective tax rate of approximately 22.5%. Based on these updates, we are raising our adjusted EPS guidance to between $9.30 and $9.50. All other elements of our fiscal year 2026 guidance remain unchanged. This concludes our prepared remarks on the business and results for the third quarter of fiscal year 2026. Operator, we are now ready to open the call to questions. Operator: Our first question comes from Gavin Parsons with UBS. Gavin Parsons: On the aftermarket growth rate, obviously, very difficult comps that slowed down a little bit. Anything to call out in terms of either customer behavior or identify for the slowdown? And then if you could speak to how spare LRUs are trending relative to the elevated past few quarters? That would be great. Charles Blankenship: Sure. The inputs that we've received from airline customers and other MRO shops have been fairly steady to increasing, I'd say, across the LEAP GTF product portfolio and very -- and quite steady on the legacy and wide-body and regional. So no real slowdown that we see on inputs, which is good based on the macro environment that we're involved in. Inputs are strong. So we like that. As far as spare LRUs go, from a macro standpoint, I'll say a few things, I'll turn it over to Bill. From a macro standpoint, as part of our strategic planning, we were updating kind of how the entire fleet ratios are looking for the spare LRUs compared to number of engines in the field. And we're very satisfied that we're tracking well to the predictions and the model that we had at the start of the program. So we don't think there's an overdue backlog or pull forward or anything going on like that. We feel like we're tracking to the model largely over an extended period of time. Now that can vary quarter-to-quarter based on when airlines place POs or when they decide to take action on crossing certain delivery concentration marks. I don't know, Bill, do you have anything else on that? William Lacey: I'll just add, Chip, that in Q3, LRUs performed very well. They were strong. And I would expect that going into the fourth quarter that they'll remain level -- elevated, but probably will come down slightly from what we experienced in Q3. Charles Blankenship: More like the first half? William Lacey: More like the first half. Charles Blankenship: Yes. Operator: Your next question comes from Scott Mikus with Melius Research. Scott Mikus: Chip and Bill. Sorry if I missed this, I'm juggling 4 earnings reports this evening. But we've seen the engine OEMs comment that commercial aftermarket sales and orders continue to be strong in the legacy engine programs like the CFM56 and V2500. It seems like you're seeing the same. But flight activity is essentially flat year-to-date. Are you concerned that airlines or MRO shops are piling up excess inventory on the legacy platforms? And is there a risk that creates destocking maybe in '27? Charles Blankenship: So the way we look at this and we measure it is really on just sort of monthly inputs to our shop that we receive on the LRUs. So V2500 fuel control, CFM56, HMU, GEnx, GE90, all of these LRUs inputs as we measure them per month, we don't -- we see sort of a normal variation in noise, not anything that would say there's a trend. It's slightly up over time for the wide-body. It's relatively stable for regional and it's relatively stable for legacy narrow-body. Does that get your question? Scott Mikus: Yes, that does. That helps. Another quick question now. Rolls-Royce actually put out a presentation for its Power Systems segment, where they're talking about roughly a mid-teens growth rate for the next several years. You acquired L'Orange from them back in 2018. You have other power gen customers that are seeing strong demand. Is that mid-teens growth CAGR kind of the right way to think about your power gen and oil and gas revenues at the Industrial segment for the next few years? Charles Blankenship: Yes, I'm not really sure exactly what the content of that presentation was because people are now talking about sort of base grid power demand versus behind-the-meter demand and things associated with data centers. They're talking about them a little bit separately. And so for the data center demand, we do see that growing at quite a high rate, whereas the demand for, I'd say, more generic grid-based power generation is a little bit less than that, but still reasonably strong. We are working very closely with each of our power gen customers on how to handle this good challenge associated with this demand. Last earnings call, I pointed out that for a number of years, I've said we have the right amount of capacity to deal with the power gen demand. But sequentially, numerous customers have come to us and continue to increase their forecast for 2027, '28 and beyond into the early 2030s. And in order to -- if all those cases are true, we'll have to expand capacity to be able to serve those levels of demand. So right now, we're in the process of having very detailed discussions with our customers about how -- what the risk case is for all this demand and trying to make sure that we understand it, and we'll make a prudent allocation of capital to capture this fairly unique opportunity that we find ourselves with the right products on our side, on the right customer products to capture this demand. It's one of those things that I think we'll be in a better position to talk about what that looks like at our Investor Day. Operator: Your next question comes from David Strauss with Wells Fargo. David Strauss: You talked about -- it sounds like there was this rev rec issue on the defense side. There was a benefit on the Aero margin side. What were kind of the clean -- as you guys calculate, what were kind of the clean incremental Aero margin? What was that this quarter? William Lacey: Yes. The exact incrementals, I'll have to get that. On Aero, backing out the pricing item, it would take their earnings rate from 24% down to 23%. So I would expect those incrementals will still be pretty good there. And then on the rev rec item for industrial, that did not have a margin impact. So the incrementals are as reported. David Strauss: Okay. I'm sorry, I thought it was a rev rec on the defense side, I might have -- I didn't hear that correctly. William Lacey: Right. Right, sorry. The defense -- that is right. Charles Blankenship: That is right. And it is on the Aero defense side. William Lacey: Aero defense side. David Strauss: Okay. All right. Yes. I mean it looks like if you use calculated share on what you report, it's like 39% incrementals in Aero. So I was just trying to get to kind of a clean number there. And then on free cash flow, Bill, you talked about the receivable balance. I guess you've raised -- as we've gone through the course of the year, you raised your EPS guidance by a fair amount. The free cash flow guidance has kind of remained unchanged. I know there's a range there. But are you just seeing more of a working capital build this year than you kind of would have anticipated? I mean, I know there's some working capital build as you kind of outgrow your expectation, but I would have thought maybe the higher EPS as we've gone through the year that might lead to some sort of increase in the free cash flow guide. William Lacey: Sure. Sure, David. First, let me -- the clean incremental is about 31%. So just to cover that off. And then going to your question, yes, so in our original guide, we assumed some -- getting some efficiencies in our turns. I know we got it in us. I know we have the right initiatives lined up, and I know we're going to get there. But we also started seeing clearly that the airframers were going to deliver on the rate increases. And as we were sitting there and to get that -- to get that turn improvement, it would cause us to have some changes in supply chain and our commercial team and then introduce the level of risk that with the demand growth we were seeing, we just weren't willing to take. So while we're not getting efficiencies, we're also not getting worse. So that added the investment in inventory beyond what we had in our original investment -- in our original guidance. And so that's eaten up sort of the EPS growth in our -- in the guidance that you're seeing is being eaten up by that, if that makes sense. Operator: Your next question comes from Louis Raffetto with Wolfe Research. Louis Raffetto: Bill, I know you talked about or Chip, maybe you even talked about the fixed cost absorption in Industrial, but obviously, backing out the China on-highway that 21% margin in Industrial is impressive. So there's nothing one-time nature in there? Just trying to sort of balance that versus the sort of 14%, 15% we saw last year, 17% in the first half of this year. So anything to note? William Lacey: Yes. So Lou, it is operational, but it had to do with one of our growing product lines, business lines here, not have as much growth this quarter and seeing some of the other business lines come through that had higher margin rates. And so the mix of sort of business unit, the mix of products played favorably for us this quarter. Now I expect that the business unit I spoke that has a little more negative mix will come back next quarter, and I would expect that we see the core Industrial earnings back to what you saw in the first half. Charles Blankenship: Yes. So I'd just add that the Industrial team has shown themselves to be very good at executing on volume leverage. And so as they continue to work Kaizens and respond to the customer demand in the gas turbine side in the recip engine side associated with power gen and the steady increase in marine and other applications that they're well positioned -- but as Bill said, we had some mix tailwind this quarter, but I still like the direction that they're going and how they're performing. William Lacey: 18% is nothing to sneeze at. Charles Blankenship: We'll take it. Louis Raffetto: Yes, it certainly shows the potential of at least a large portion of the business, which is good to see. And maybe, Bill, just one more. I know you mentioned you expect CapEx to step up a lot here in the fourth quarter. But I mean, are we really going to double CapEx again in the fourth quarter to hit the -- more than double, I guess, to hit the guide? William Lacey: Yes. I've asked that question a few times myself, Lou. And the team has come back. They have the -- there's some big chunks, as you can imagine, that's associated with what we have to get done in Q4. It's primarily around finishing the Spartanburg facility around purchasing production machinery for A350 spoiler. And again, those are pretty chunky. So we've got line of sight to it. 5 to 10 is in the mix there, but I think we will consume most of that and get to the $290 million that we guided towards on capital expenditures. Operator: Your next question comes from Gautam Khanna with TD Cowen. Gautam Khanna: Just to follow up on that Industrial question on profitability. What is kind of possible over time in the Industrial business? You guys have talked about 16% to 18% trending better than that. But I'm just curious like with all the initiatives you guys have implemented on SKU rationalization and pricing actions and just efficiencies over a longer period of time, what do you think is actually a possible level for the Industrial segment to level out at? Charles Blankenship: Yes, Gautam, we'll describe that in more detail at our Investor Day. But I'd leave you with these thoughts, which is, like, as we stand today in a growing demand environment where both we and our customers are able to get price, and we are able to accelerate our lean transformation on the floors of our factories and get efficient in our supply chain, we can improve further from this point. We said mid-teens at the last Investor Day, and we've been demonstrating better than that fairly consistently. But as far as like getting better from where we are today. We're obviously investing and challenging our teams and driving to continuously improve. However, I don't know what the environment is going to be in the future yet, and there are other factors that come into play. But we like the investments we're making in automation. We like the investments we're making in our lean transformation. And like you referenced, the product portfolio, we've really made some efficiency moves there to optimize the portfolio and how we serve customers and are able to run our factories. So I believe we're on a continuous improvement journey. There's quite a bit more productivity in play, but there are other factors to deal with as well, and we'll be -- give you a fulsome explanation of what we see at our Investor Day. Operator: Your next question comes from Sheila Kahyaoglu with Jefferies. Kyle Wenclawiak: This is Kyle on for Sheila. I guess just to circle up on the Aerospace margins. I think you just said 31% core incrementals, and that's despite the OE growth kind of leading the pack in commercial. So maybe if you can talk about the puts and takes there? And then secondly, was that price already assumed in the full year guide? And if you're feeling generous, can you tell us what end market and maybe even what customer that's related to? William Lacey: Okay. So I always feel generous, but I'm not that generous to give up the customer. But as it relates to the price overall, we're guiding for the full year for that to be close to 8% for the company. And in third quarter, our price was 10% and Aero contributed more than the 10% and then Industrial less and brought it down to the 10%. So that's kind of where those items came from, Kyle. And I can't remember the first part of the question. Charles Blankenship: Yes. I guess you referenced, Kyle, a core flow-through, which I would encourage us not to use that number. Bill was just cleaning up the flow-through number for one of the earlier questions in terms of removing that onetime price reconciliation from the financials. Kyle Wenclawiak: Yes, helpful and understood. I guess just as you think about these kind of price negotiations that keep coming up better and better, it seems like quarter-after-quarter, whether there's still a sizable kind of opportunity that exists out there. I know you guys have talked in the past that you'd expect price to moderate towards more typical levels, but you guys keep surprising to the upside. So just curious. Charles Blankenship: Sure. I'll start and flip it to Bill real quick. But I'd say we've really made it through the -- all of our LTA agreements for the first round that we closed out sort of post 2022. So from now forward, it should moderate, and I'll let Bill kind of fill in the blanks there. William Lacey: Yes. Chip, I think you covered it. I think as we look at going forward that I would expect price between 3% and 5% would be a more normal rate. And it will -- price will still play a role in margin expansion along with working some of the other muscles as we talked about. Charles Blankenship: Yes. It's up to us to fill in the rest with the productivity, which we're well deployed to achieve. Operator: Your next question comes from Kevin -- Ken Herbert with RBC Capital Markets. Kenneth Herbert: Chip and Bill. I wanted to just -- if you could dig a little deeper on the defense OE side. Obviously, we can appreciate the onetime item in the quarter. But how do you expect that to step up sequentially into the fourth quarter as you think about the broader demand and where you're exposed on the munition side in particular? Charles Blankenship: I guess the way I'd describe it is no real change from prior quarters in terms of defense OE. It's sort of -- we're seeing price roll through for some smart defense in 3Q, but I think in 4Q, that starts to moderate. So we're not holding out defense OE as a large growth lever in this environment right this minute. Again, the future, we see a lot of potential for it to -- for defense to have a longer run at these higher levels, especially in smart defense, but we don't have any indication that's going to happen anytime soon. So I think sort of a moderate performance in OE in defense OE is what we can expect. Kenneth Herbert: Okay. And just to clarify, for the commercial Aero OE growth in the quarter, the up 34%, was there any -- do you get a sense of any sort of restocking or anything unusual beyond just the build rate cadence on that? And maybe what are you seeing with sort of inventory levels of your product at your customers? Charles Blankenship: It feels like that, that sort of stocking level at the customers has returned to normal to slightly below what their MRP systems would like. So we still feel a strong pull on delivery. A lot of this rating -- the growth is due to our ability to get more product through the factory. So the combination of working with our suppliers and inside our 4 walls, increasing that production is what led to that growth plus some price. So I don't see anything unusual. And we feel like we're pretty much following the airframer rates. In some cases, we're -- their demand for our increased rate is ahead of their rate break. So we do sometimes see an earlier break in the demand for us. Operator: Your next question comes from Noah Poponak with Goldman Sachs. Noah Poponak: How would you frame at this point what's possible or likely or realistic in your Aerospace aftermarket growth rate of the next 4 to 8 quarters compared to what you've been able to achieve in the last 4 to 8 quarters? Charles Blankenship: Well, that sounds like a trick question. So we see -- we like the long-term story. And what we shared at Investor Day last time was kind of a cartoon of graphs that showed that we believe that the Woodward case could likely grow at twice the rate of the overall market based on our product positions in terms of what's the installed -- where the installed base is growing. So we still believe in that cartoon and those graphs. We believe we see the proof points along the way with the input we're seeing from LEAP and GTF and how strong that the newer wide-body projects -- products are performing. So we believe that, that story is playing out in front of us. As far as exactly what happens in the next few quarters, we're not in a position to reveal that because it could be a little bit noisy up and down, but we believe we'll be in a position to update that chart for you at the Investor Day. William Lacey: And just to add to that is obviously, again, the LRUs and those move can also make the quarters a bit lumpy. Charles Blankenship: I guess the other thing I'd add -- the other thing I'd add, Noah, is that we've embarked upon these elite licensee relationships with really top-of-the-shelf MRO providers, and we'll be working with them on provisioning and support of the agreements and things of that nature that will also provide some growth levers for the next year. Noah Poponak: Okay. I appreciate that. Yes, it's -- I think the kind of medium- to long-term algorithm is reasonably clear, but in the shorter term, just compares and there's a lot to triangulate. I wasn't trying to trick you, although I may end up tricking myself, I guess. You guys have spent a lot of time talking about narrow-body contribution to this equation. How does your wide-body exposure and its contribution to your medium- to long-term aftermarket growth compare to narrow-body in terms of the multiplier effect? Charles Blankenship: So I think the -- I'm not sure the best way to look at the multiplier. Noah Poponak: And that's also an unfair question. Charles Blankenship: Yes, yes. The multiplier effect is the hard part to answer because the multiplier for something like the 787 is comparing to something so old that's not really very much into our MRO system because the large amount of the 767s, let's say, are on -- they're in the freighter class and not many shop visits. So I wouldn't get into the multiplier answer. But from a GEnx and GE90 standpoint, these are the major customer platforms that we're on with significant LRUs that require a good amount of service. And those are very good businesses for us, and we work very closely with GE through the Convergence joint venture to service those LRUs. And we really like that business. It's going very well and growing. Noah Poponak: Okay. And just one last one. You guys have talked about 30% to 35% incrementals in both segments margin over time. Can we use that off of where you -- where you're now planning to end '26? Or maybe Aero has moving pieces that wash out and that's a yes, maybe Industrial that's too high given what you just did in 3Q, but how should I think about that? Charles Blankenship: That's a great question, Noah. And the one that we are working through right now as we develop our annual operating plan for our fiscal '27. So it's a little premature for us to guide that because that -- I mean, that is the guidance for next year really in terms of earnings growth. So we've been saying that for a while. Those are the incrementals we believe in long term. We've got to do the work to make sure that we're putting a robust plan out there for next year, and we'll guide accordingly. Operator: Your next question comes from Alexandra Mandery with Truist. Alexandra Eleni Mandery: Nice results. In terms of automation, is there a particular segment or end market you see benefiting the most from increasing automation? Charles Blankenship: So I think from our standpoint, automation is a pretty generic way of approaching machining, assembly, test, material flow, transport, logistics, and that really serves all end markets equally from a sort of an inside-out standpoint. It's not really market-driven. It's more manufacturing driven. And so I feel like it's spread equally amongst the end market that we serve. Alexandra Eleni Mandery: For sure. And then earlier, you mentioned the supply chain. I guess what are the weak points you might be seeing? And what efforts, I guess, maybe more specifically, have you taken with customers to kind of circumvent any supply chain issues in the future? Charles Blankenship: So the ones that we're struggling with the most are the ones that like the entire industry has on the forefront of their work list. So castings and forgings as well as rare earth metals as we look forward. We haven't had a big problem yet with those, but that's one that we all forecast coming to be a big challenge within the next few quarters. So we and our customers and suppliers are all working together to try to allocate the right capacity to keep everybody building what they need to build a few quarters away from now on the rare earth. That's sort of an industry level work. As far as on the castings and forgings, we've been working very hard to transition from castings to -- and forgings to billet that's hogged out on a CNC machine. It's not a very efficient use of material, but it sure is a better way to ensure continuity of the supply chain. So we've taken a lot of design for manufacturability approaches to control our own destiny on the supply chain. That all being said, we're still carrying 5 to 10 problematic suppliers that sort of pop up as problems in either the Aero or Industrial segment. And so we just have to stay tuned to companies that run into trouble. We have -- for anything that has to do with machining, we have rapid response centers set up at 3 different sites. We've processed over 15,000 machine pieces through that network of ours in order to bail out suppliers. So we're very active on that front. Hopefully, one day, it doesn't require quite as much effort. But for now, that's what we're doing. Operator: Your next question comes from Scott Deuschle with Deutsche Bank. Scott Deuschle: Bill, why was commercial aftermarket revenue down sequentially? William Lacey: Yes. So first of all, just the -- we feel good about that business and its continued strength. A part of what happened in Q3 was some good strength in Q2. We saw some shipments not get out of Q1. And in Q2, we were able to get out when we needed for Q2 as well as clear out some of the shipments for several reasons that got hung up, and we were able to get all of those out. And so that impacted Q3 from a sequential, but as you saw, the year-over-year was pretty strong. So again, we feel good about it, and I wouldn't read too much into it. Scott Deuschle: Okay. And then just to make an attempt to follow up on Noah's question, do you think the Aerospace business, Chip, do you think it will be able to drive at least some level of margin expansion in 2027? Or is there a doubt as to whether it can expand margins at all in '27? Charles Blankenship: Our plans are to expand margins. We're measuring each of our product managers and each of our business unit VP GMs on a margin expansion target. We rolled all that up and wrestled around and played catch ball with it through our strategic planning process. Now we just got to get it orchestrated into an annual operating plan that we all like. But really, the target is margin expansion. I believe we can do it. We've got -- in that -- it's not just like saying do better. We have investments in automation and lean transformation and productivity that need to bear fruit, and we're focused on doing that for FY '27 without giving you a number. Scott Deuschle: Okay. So even with all these potential headwinds of spare LRU normalization, Spartanburg hiring, ERP costs, OE mix, all that, you think the business operationally still has potential to expand margin. Charles Blankenship: Yes, all of that plus the moves we're doing to improve the long-term performance of the business that require resource and investments to accomplish. We think even with all those things going on, we've got -- we have enough horsepower and capability to deliver margin expansion. Scott Deuschle: Okay. And then Chip, can you update us on where the business is at in terms of the size of LEAP and GTF revenue base relative to CFM56 and V2500? Charles Blankenship: We're still marching towards that crossover from a repair standpoint. I think as I said last time, we've already crossed it if you include repair plus spare LRUs. So I think right on track. But the one thing we didn't model was the legacy business hanging on this well in terms of both price, work scope and volume. So we're excited about the race that we're in. Operator: Mr. Blankenship, there are no further questions at this time. I will now turn the conference back to you. Charles Blankenship: Thank you very much, operator. Before we end the call, I want to let everyone know that we finalized the date of our Investor Day. It will be held on Thursday, March 4, 2027, in New York City, and I look forward to seeing everyone there. Thanks, everyone, for joining today's call. Operator: Ladies and gentlemen, that concludes our conference call today. A rebroadcast will be available at the company's website, www.woodward.com for 1 year. We thank you for your participation in today's conference call. Before you buy stock in Woodward, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Woodward wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $397,405!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,344,091!* Now, it’s worth noting Stock Advisor’s total average return is 953% — a market-crushing outperformance compared to 214% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 7, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Woodward (WWD) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

Find your next quality investment with Simply Wall St's easy and powerful screener, trusted by over 7 million individual investors worldwide. Woodward (WWD) reported quarterly results that topped expectations and raised full year guidance, yet the stock dropped as investors focused on a lower free cash flow margin and concerns about valuation. See our latest analysis for Woodward. Over the past month Woodward’s share price return is down 14.3% and the 7 day share price return is down 13.9%. However, the 1 year total shareholder return of 39.68% and 5 year total shareholder return of 227.38% still reflect strong longer term momentum. Recent valuation and free cash flow concerns have cooled this in the short term. If you are looking beyond Woodward and want to see what else is moving as industrial and aerospace trends play out, now could be a good time to check out 35 power grid technology and infrastructure stocks After a sharp pullback despite strong earnings, the real tension for anyone looking at Woodward now is simple: lean into the weakness or wait in case free cash flow worries and valuation squeeze the share price further before improving. Against Woodward’s last close at $360.75, the most followed narrative points to a fair value of $444.55, which represents a sizeable gap to current pricing. Read the complete narrative. Want to understand why this valuation stretches well beyond today’s price? The core of the narrative focuses on rising earnings power, richer margins, and a future earnings multiple usually reserved for higher growth sectors. Curious which exact growth and profitability assumptions would need to hold to support that fair value? The full narrative breaks down those moving parts in detail. Result: Fair Value of $444.55 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, Woodward’s story could change quickly if heavy capital spending fails to translate into free cash flow or if supply chain disruptions continue to squeeze margins. Find out about the key risks to this Woodward narrative. The first narrative frames Woodward as 18.8% undervalued against a $444.55 fair value. Our P/E-based checks tell a more cautious story. The stock trades on a 38.6x P/E, which is higher than the estimated fair ratio of 32x and slightly higher than the US Aerospace & Defense industry at 37.9x. Compared with a peer average P/E of 51.5x, Woodward does not screen as the most expensive stock in its group, yet the gap versus its own fair ratio suggests limited room for error if growth or margins soften. The question for you is which set of assumptions feels more realistic when sentiment cools. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Woodward for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 55 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity. If this Woodward story feels mixed so far, now is a good moment to check the data yourself and decide what really stands out. For a quick way to see what investors are optimistic about, start with the 3 key rewards. If Woodward has sharpened your focus, do not stop here. Use the Simply Wall Street Screener to spot other stocks that fit what you want next. Target potential upside by scanning companies that combine quality with attractive pricing through the 55 high quality undervalued stocks. Strengthen your income stream by reviewing companies with robust yields and payment records using the 9 dividend fortresses. Sleep easier at night by checking stocks that carry lower risk profiles with the 81 resilient stocks with low risk scores. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include WWD. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Woodward, Inc. reported past third-quarter 2026 results with sales rising to US$1,109.71 million and net income to US$146.68 million, alongside higher basic and diluted earnings per share from continuing operations versus a year earlier. Despite this improvement in quarterly and nine‑month earnings, investors focused on pressures around free cash flow margins and valuation, raising questions about how much of Woodward’s operational progress is already reflected in expectations. Next, we’ll assess how stronger earnings amid free cash flow concerns may influence Woodward’s existing investment narrative around growth and efficiency. The latest GPUs need a type of rare earth metal called Dysprosium and there are only 29 companies in the world exploring or producing it. Find the list for free. To own Woodward, you need to believe its position in aerospace controls, electrification and efficiency can offset cyclical swings and heavy investment needs. The latest earnings beat supports that broader thesis, but the stock’s sharp pullback shows the near term catalyst now hinges on convincing investors that free cash flow can catch up to reported earnings. At the same time, rich valuation metrics keep magnifying the biggest current risk around cash generation and capital intensity. The most relevant recent development is Woodward’s third quarter 2026 report, which showed stronger sales and earnings alongside ongoing concerns about free cash flow margins. That mix of solid profit growth and weaker cash conversion sits directly against the company’s investment story of improved efficiency and higher quality earnings. How management balances continued spending on electrified aerospace programs with the need to protect cash could shape how durable the current growth narrative really is. Yet behind the strong earnings headlines, investors should also be aware of the pressure that heavy capital spending and weaker free cash flow could create if... Read the full narrative on Woodward (it's free!) Woodward's narrative projects $5.1 billion revenue and $749.1 million earnings by 2029. This requires 8.6% yearly revenue growth and about a $235 million earnings increase from $513.8 million today. Uncover how Woodward's forecasts yield a $444.55 fair value, a 23% upside to its current price. Some of the lowest ranked analysts take a tougher view, even before this quarter, assuming earnings of about US$794.4 million by 2029 and warning that if Woodward cannot keep up with accelerating electrification demands, its legacy technologies and margins could come under much greater pressure. Explore 5 other fair value estimates on Woodward - why the stock might be worth 19% less than the current price! Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts. A great starting point for your Woodward research is our analysis highlighting 3 key rewards that could impact your investment decision. Our free Woodward research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Woodward's overall financial health at a glance. Don't miss your shot at the next 10-bagger. Our latest stock picks just dropped: Find 55 companies with promising cash flow potential yet trading below their fair value. AI is about to change healthcare. These 41 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early. Outshine the giants: these 16 early-stage AI stocks could fund your retirement. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include WWD. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

3 Non-Tech Stocks Still Winning Big on AI EMCOR Group (NYSE:EME) reported record second-quarter revenue, operating income and remaining performance obligations, driven by strong demand in data centers, institutional projects, manufacturing and industrial work, and other end markets. The company also raised its full-year 2026 revenue and earnings outlook. Second-quarter revenue rose 19.8% year over year to $5.15 billion, including organic growth of 19.6% after excluding acquisitions and the divestiture of EMCOR UK. Operating income increased nearly 32% to $547.3 million, while operating margin expanded 100 basis points to 10.6%. Diluted earnings per share climbed 35% to $9.06 from $6.72 in the prior-year quarter. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now Palantir and Woodward Jumped on Earnings Beats—Here Are 3 More Setups to Watch “EMCOR delivered another outstanding quarter, highlighted by exceptional organic growth, strong conversion of revenue into operating income and cash flow, continued booking strength, and record remaining performance obligations,” Chairman, President and Chief Executive Officer Tony Guzzi said. Electrical construction revenue increased 24% to $1.66 billion, led primarily by a 45% increase in network and communications revenue, which includes the company’s data center business. The segment generated operating income of $231.4 million, up 46.8% from a year earlier, with operating margin rising 210 basis points to 13.9%. → Microsoft Just Flipped the AI Spending Narrative Overnight 3 Data Center Beneficiaries Raising Dividends Up to 60% Chief Financial Officer Jason Nalbandian said electrical construction benefited from field execution and a more favorable project mix, with most of the margin improvement coming from higher gross profit margin. Mechanical construction revenue grew more than 31% to $2.3 billion. Revenue in the network and communications market more than doubled from the prior-year quarter, supported by increased cooling requirements for data centers and expansion into adjacent geographies. The segment also recorded a 77% increase in institutional revenue, a 26% increase in commercial revenue tied in part to warehousing, distribution and logistics projects, and an 18% increase in manufacturing and industrial revenue. → Carrier Earnings Could Send the Stock to a New All-Time High Mechanical construction operating income rose 20.1% to $286.6 million. Its 12.5% operating margin was down 110 basis points year over year, reflecting a greater share of projects in which EMCOR serves as construction manager or prime contractor, along with more guaranteed maximum price and cost-plus contracts. Nalbandian said the shift was driven in part by water and wastewater and food-processing work, as well as more complex data center projects. Combined, the electrical and mechanical construction segments generated quarterly revenue of $3.96 billion, up 28%, and a combined operating margin of 13.1%. U.S. building services revenue increased 5.6% to $837.7 million, while operating income rose 26.6% to $63.4 million. The segment’s operating margin expanded 130 basis points to 7.6%, aided by a more favorable project mix, improved execution and restructuring actions in commercial site-based services. Industrial services revenue rose nearly 26% to $353.8 million, driven by field-services activity, increased petrochemical project volume, turnaround work and progress on a large solar project. The segment generated operating income of $9.6 million, representing a significant improvement from the prior-year period. EMCOR ended the quarter with record remaining performance obligations, or RPOs, of $17.14 billion. That figure was up 44% from a year earlier, 29% from December and 10% sequentially from March. Guzzi said 95% of the RPO growth was organic. Demand in network and communications, led by data centers, remained “exceptionally strong,” according to Guzzi. He said customer investment in artificial intelligence infrastructure and digital transformation initiatives continued to create opportunities. RPO growth was also broad-based, with strong bookings in water and wastewater, healthcare and institutional markets. Management said a larger volume of recently booked work and longer-duration projects have affected the timing of revenue conversion. Nalbandian said historically about 85% of RPOs burned within 12 months, compared with roughly 75% to 76% currently, reflecting project size, water and wastewater work, and the volume of new bookings. The company discussed five electrical construction acquisitions: B&B Electric in Wisconsin, Sidney Electric in Ohio, Giles Electric in Florida, Schmidt Electric in Central Texas and Connelly Electric in the Chicago-area market. Guzzi said the businesses expand EMCOR’s trade expertise, geographic coverage and ability to serve customers in growing markets. The five businesses collectively generated $625 million in revenue and $105 million in EBITDA during the trailing 12 months ended June 30. EMCOR expects the acquisitions to contribute between $250 million and $275 million of revenue during the second half of 2026. Nalbandian said their near-term effect on diluted earnings per share would be limited by intangible asset amortization and reduced net interest income, though the businesses are expected to provide additional accretion as acquired backlog is completed over the following 12 to 18 months. Management said Schmidt and Connelly are expected to close in the third quarter. The acquisitions include an upfront purchase price of $750 million, with up to $90 million in potential earn-outs for two of the transactions, according to Nalbandian. EMCOR finished the quarter with $924 million in cash and $1.45 billion of working capital, and generated $289.4 million in operating cash flow during the quarter. Based on first-half performance and its record RPO position, EMCOR raised its full-year 2026 outlook. The company now expects revenue of $20 billion to $20.5 billion and diluted earnings per share of $32 to $33.25. Guzzi said the outlook assumes sustained demand, continued operating performance, disciplined project execution and pricing discipline. He also cited risks including geopolitical conflicts, commodity-cost fluctuations and equipment lead-time volatility, while saying the company’s teams have demonstrated an ability to manage through those conditions. EMCOR Group, Inc is a provider of mechanical and electrical construction, industrial and energy infrastructure, and facilities services to commercial, institutional and industrial clients. The company delivers a broad range of services that include design-build and traditional construction of mechanical, electrical and plumbing systems; ongoing facilities maintenance and operations; and specialized industrial services for sectors such as manufacturing, data centers, healthcare and utilities. EMCOR's service offerings encompass HVAC, plumbing, electrical installation and maintenance, fire protection, building automation and controls, commissioning, testing and balancing, and energy management solutions. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "EMCOR Group Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Interested in Woodward, Inc.? Here are five stocks we like better. Strong quarterly performance: Woodward reported record third-quarter sales of $1.1 billion, up 21% year over year, while adjusted EPS increased 43% to $2.52. Higher pricing, volume, factory output and productivity gains drove significant margin expansion. Aerospace and industrial demand remained robust: Aerospace sales rose 19%, led by commercial original-equipment and services growth, while industrial sales increased 26%, supported by marine, LNG infrastructure and data-center power demand. Fiscal 2026 outlook raised: The company increased its adjusted EPS guidance to $9.30–$9.50 and expects to return approximately $700 million to shareholders through dividends and buybacks. Management also highlighted capacity expansion, automation and lean initiatives as future productivity drivers. 3 "Tollbooth" Stocks With Hidden Monopolies in Their Industries Woodward (NASDAQ:WWD) reported fiscal third-quarter results marked by double-digit sales growth, higher margins and increased earnings, prompting the aerospace and industrial components supplier to raise its fiscal 2026 adjusted earnings guidance. Chairman and Chief Executive Officer Chip Blankenship said sales increased 21% year over year during the quarter, while adjusted earnings per share rose 43%. He attributed the performance to demand across aerospace and industrial markets, pricing actions, higher factory output and early productivity gains from the company’s lean-transformation efforts. → This Tiny AI Supplier Could Be More Important Than the Chipmakers Palantir and Woodward Jumped on Earnings Beats—Here Are 3 More Setups to Watch “We delivered significant margin expansion, primarily driven by pricing actions,” Blankenship said, adding that productivity gains from lean initiatives were beginning to flow through the company’s factories. Chief Financial Officer Bill Lacey said Woodward generated record quarterly net sales of $1.1 billion, up 21% from the prior-year period. Reported earnings per share were $2.40, compared with $1.76 a year earlier, while adjusted EPS was $2.52, also compared with $1.76. → Refiner Stocks Are Near Record Highs—Can Iran-Driven Margins Keep Them There? Woodward: Delivering Critical Components for the Aerospace Boom Free cash flow totaled $87 million in the quarter, bringing the fiscal year-to-date total to $196 million, up 23% year over year. For the first nine months of fiscal 2026, operating cash flow was $352 million, compared with $238 million in the prior-year period, largely reflecting higher earnings. Woodward had capital expenditures of $156 million through the first nine months and expects a meaningful increase in spending during the fiscal fourth quarter. Lacey said the expected spending includes completing the Spartanburg facility and purchasing production machinery for an A350 spoiler program. The company continues to expect approximately $290 million in capital expenditures for the full year. → Innovative ETF Strategies That Are Paying Off This Summer The company ended the quarter with debt leverage of 1.6 times EBITDA. Through the first nine months, Woodward returned $608 million to shareholders, including $553 million in share repurchases and $55 million in dividends. It now expects to return approximately $700 million to shareholders through dividends and repurchases during fiscal 2026. Aerospace segment sales rose 19% to $709 million. Commercial original-equipment sales increased 34%, with output generally aligned with rising airframer production rates, while commercial services revenue rose 24%. Lacey said commercial services demand reflected high utilization of legacy aircraft, growing activity on CFM LEAP and Pratt & Whitney GTF engines, and continued service demand across wide-body and regional aircraft platforms. Defense services sales increased 20%, aided by a large delivery of T700 spares and improved casting supply. Defense OEM sales declined 6% because of a one-time revenue-recognition adjustment. Excluding that item, defense OEM revenue would have grown by the mid-single digits, according to Lacey. Aerospace segment earnings increased to $170 million, or 24% of sales, from $126 million, or 21.1% of sales, a year earlier. The margin improvement reflected pricing and volume leverage, partly offset by inflation and unfavorable mix. A one-time retroactive pricing adjustment tied to a contract under negotiation contributed about 100 basis points to aerospace margin in the quarter. Management said it does not see evidence of unusual inventory buildup in commercial aerospace channels. Blankenship said customer inventory appears to have returned to normal or slightly below levels preferred by customer planning systems, while Woodward continues to experience strong demand for deliveries. The company also announced a partnership with HAECO to establish an elite licensed service facility for Woodward line-replaceable units on CFM LEAP engines in Greater China and the Asia-Pacific region. Blankenship said the company’s service-capacity strategy is defined for the next several years and is focused on staying ahead of customer demand. Industrial segment sales increased 26% to $401 million. Core industrial sales, excluding China on-highway activity, grew 19%, supported by higher volume across the segment’s primary markets and price realization. Marine transportation sales increased about 24%, driven by higher shipyard output and services demand. Oil and gas sales grew 11%, primarily due to LNG infrastructure-related volume. Management said upstream capital spending is showing signs of recovery, particularly in the Middle East. Power generation sales rose 19%, reflecting demand for data-center base and backup power. China on-highway sales were $40 million, exceeding management’s expectations. However, Woodward does not expect significant China on-highway sales in the fiscal fourth quarter as it completes the wind-down of that business. Industrial segment earnings rose to $88 million, or 22.1% of sales, from $48 million, or 14.9% of sales. Core industrial margins were 21.2%, compared with 15.6% a year earlier. China on-highway contributed approximately 90 basis points to segment margin. Lacey said favorable product and business mix helped the segment’s third-quarter margin performance, but he expects core industrial earnings margins to return closer to levels seen in the first half during the fourth quarter as a lower-margin growth business line resumes a larger contribution. Woodward completed an expansion of its high-speed fuel-injection production value stream in Glatten, Germany, which is supporting demand from Rolls-Royce’s mtu Solutions division for power-generation applications. The company is also transferring production and engineering from a recently acquired Canadian electronic-products facility to existing operations in Poland and Bulgaria, a move management said should generate cost synergies and improve returns from its THSA and related electromechanical portfolio acquisition. In addition, Woodward plans to move a Niles JDAM production line to Spartanburg to improve supply continuity and support future growth. Blankenship said automation investments are intended to expand capacity, raise productivity and reduce the need for direct-labor hiring. The company is targeting about 1,000 fewer incremental hires by 2029, representing roughly half of projected hiring needs over that period when accounting for attrition and growth. He said the initiative is not intended to replace employees, as Woodward expects to continue hiring to support growth. For fiscal 2026, Woodward raised its adjusted EPS outlook to a range of $9.30 to $9.50. It now expects aerospace sales growth of 21% to 23%, with aerospace margins of about 23.5%, and industrial sales growth of 19% to 21%, with industrial margins of about 19%. The company expects an adjusted effective tax rate of approximately 22.5%. Management said pricing should moderate after the company completed the first round of renegotiations on long-term agreements following 2022. Lacey said a more normal future pricing range would be about 3% to 5%, with further margin expansion expected to depend increasingly on productivity, lean initiatives and automation. Woodward, Inc (NASDAQ: WWD) is a global leader in the design, manufacture and service of control systems and components for the aerospace and industrial markets. Founded in 1870 and headquartered in Fort Collins, Colorado, the company specializes in motion control, fuel systems, actuation, and digital control solutions. Its offerings enable precision management of flow, pressure and motion in critical applications ranging from aircraft engines and power turbines to hydraulic systems. Woodward's product portfolio is organized into two primary segments: Aerospace and Industrial. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Woodward Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

This article first appeared on GuruFocus. Net Sales: $1.1 billion, an increase of 21% year-over-year. Adjusted EPS: $2.52, an increase of 43% compared to $1.76 in the prior year. GAAP EPS: $2.40, compared to $1.76 in the prior year. Free Cash Flow: $87 million in the quarter; $196 million year-to-date, an increase of 23%. Aerospace Segment Sales: $709 million, an increase of 19%. Aerospace Segment Earnings: $170 million, or 24% of segment sales, compared to $126 million or 21.1% of segment sales. Industrial Segment Sales: $401 million, an increase of 26%. Industrial Segment Earnings: $88 million, or 22.1% of segment sales, compared to $48 million or 14.9% of segment sales. Capital Expenditures: $156 million for the first nine months. Shareholder Returns: Returned $608 million to shareholders in the first nine months ($553 million in share repurchases and $55 million in dividends). FY2026 Adjusted EPS Guidance: Raised to between $9.30 and $9.50. Warning! GuruFocus has detected 3 Warning Signs with QCOM. Is WWD fairly valued? Test your thesis with our free DCF calculator. Release Date: July 29, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Woodward Inc (NASDAQ:WWD) delivered another outstanding quarter with sales up 21% year-over-year and adjusted EPS increasing 43%. Significant margin expansion was driven by strong price realization and productivity gains from the lean transformation. Industrial sales grew 26% with strong performance across all primary markets, including power generation and marine transportation. Aerospace sales increased 19%, with commercial OEM aligned with airframer build rates and sustained commercial services growth. The company raised its fiscal year 2026 earnings guidance, reflecting confidence in continued strong execution. Defense OEM sales declined 6% due to a one-time revenue recognition adjustment. The company is carrying higher inventory levels to support demand, impacting free cash flow. Supply chain disruptions persist, particularly with castings, forgings, and rare earth metals. Commercial aftermarket revenue declined sequentially due to shipment timing from the prior quarter. Free cash flow guidance remained unchanged despite higher EPS, due to working capital build and inventory investments. Here are the key highlights from Woodward Inc (NASDAQ:WWD)'s Q3 fiscal year 2026 earnings call. Q: On the aftermarket growth rate, obviously, very difficult comps that slowed down a little bit. Anything to call out in terms of customer behavior or identify it for the slowdown? And then if you could speak to how spare LRUs are trending relative to the elevated past few quarters, that would be great.A: (Chip Blankenship, Chairman and CEO) The inputs from airline customers and MRO shops have been fairly steady to increasing across the LEAP/GTF product portfolio and quite steady on legacy, widebody, and regional platforms. We don't see a real slowdown. (Bill Lacey, CFO) In Q3, LRUs performed very well and were strong. We expect them to remain elevated in Q4 but come down slightly from Q3 levels, more in line with the first half of the year. Q: We've seen the engine OEMs comment that commercial aftermarket sales and orders continue to be strong in the legacy engine programs like the CFM56 and V2500. It seems like you're seeing the same. But flight activity is essentially flat year to date, are you concerned that airlines or MRO shops are piling up excess inventory on the legacy platforms? And is there a risk that creates destocking maybe in '27?A: (Chip Blankenship, Chairman and CEO) We measure this by looking at monthly inputs to our shop for LRUs like the V2500 fuel control and CFM56 HMU. We see normal variation and noise, not a trend. Inputs are slightly up over time for widebody and relatively stable for regional and legacy narrowbody. We do not see an overdue backlog or pull-forward. Q: You guys have talked about 30% to 35% incrementals in both segments margin over time. Can we use that off of where you're now planning to end '26? Or maybe aero has moving pieces that wash out?A: (Chip Blankenship, Chairman and CEO) That is a great question and one we are working through right now as we develop our annual operating plan for fiscal '27. It is a little premature for us to guide that. We have been saying those are the incrementals we believe in long term, but we need to do the work to put a robust plan out there for next year and will guide accordingly. Q: Do you think the aerospace business will be able to drive at least some level of margin expansion in 2027? Or is there a doubt as to whether it can expand margins at all?A: (Chip Blankenship, Chairman and CEO) Our plans are to expand margins. We are measuring each of our product managers and business unit VPs on a margin expansion target. We have investments in automation and lean transformation that need to bear fruit, and we are focused on doing that for FY27. We believe we have enough horsepower and capability to deliver margin expansion even with headwinds like spare LRU normalization and OE mix. Q: On the free cash flow, you've raised your EPS guidance by a fair amount, the free cash flow guidance has kind of remained unchanged. Are you just seeing more of a working capital build in this year than you would have anticipated?A: (Bill Lacey, CFO) Yes. In our original guide, we assumed getting some efficiencies in our terms. However, to achieve that turn improvement while airframers were delivering on rate increases would have introduced a level of risk we weren't willing to take. While we are not getting efficiencies, we are also not getting worse. That added inventory investment beyond what was in our original guidance, which has eaten up the EPS growth in the guidance. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Woodward, Inc. WWD reported third-quarter fiscal 2026 adjusted earnings of $2.52 per share, up 43.2% year over year. The bottom line beat the Zacks Consensus Estimate of $2.39 by 5.4%. Net sales rose 21.2% to $1.11 billion but missed the consensus mark of $1.114 billion by 0.4%. Commercial OEM sales surged 34%, while demand remained broad across Woodward's Industrial markets. In the past year, shares have gained 50.6% compared with the Zacks Aerospace - Defense Equipment industry’s rise of 4.8%. Image Source: Zacks Investment Research Aerospace sales increased 19% to $709 million. Commercial OEM revenues reached $234 million as aircraft production rates increased, while commercial services generated $268 million on continued legacy aircraft servicing and growing LEAP and GTF activity. Management said service inputs remained steady to higher across newer engine platforms. Defense OEM sales declined 6% to $141 million because of a one-time revenue recognition adjustment. Excluding that item, sales would have grown in the mid-single digits. Defense services rose 20% to $66 million. Segment earnings advanced 35% to $170 million, and margin expanded 290 basis points (bps) to 24%. A retroactive contract pricing adjustment added about 100 bps to the margin. Industrial sales climbed 26% to $401 million. Transportation revenues increased 40% to $180 million, aided by strong marine demand and $40 million of China on-highway sales. Power generation rose 19% to $145 million on robust data-center demand for prime and backup power. Oil and gas revenues advanced 11% to $76 million, supported by liquefied natural gas infrastructure activity and improving upstream capital spending. Industrial earnings jumped 86% to $88 million, while margin expanded 720 bps to 22.1%. China on-highway contributed about 90 bps to the margin. Core Industrial sales, which exclude that business, grew 19% to $361 million. Adjusted EBITDA increased 50% to $249 million, while adjusted EBIT rose 58% to $217 million. Total costs and expenses were $916.2 million compared with $788.6 million a year earlier. Profitability benefited from higher volume and pricing, partly offset by inflation, unfavorable mix and a higher tax burden. The adjusted effective tax rate rose to 24.2% from 14.5%. Companywide price realization was 10% in the quarter. Management expects full-year pricing of about 8%, with a more normal 3-5% range going forward. Lean initiatives are beginning to improve factory productivity. Automation across machining, inspection and material handling is intended to reduce the need for roughly 1,000 incremental hires by 2029. Woodward, Inc. price-consensus-eps-surprise-chart | Woodward, Inc. Quote Net cash provided by operating activities increased 17% to $147 million. Free cash flow declined 12% to $87 million as capital expenditures more than doubled to $60 million. Management expects spending to rise sharply in the fourth quarter, mainly to finish the Spartanburg facility and purchase equipment for the A350 spoiler program. Woodward ended June with $475 million in cash and cash equivalents and $1.34 billion of total debt. EBITDA leverage was 1.6 times. Through nine months, operating cash flow reached $352 million and free cash flow totaled $196 million. The company returned $608 million to shareholders, including $553 million through repurchases and $55 million through dividends. WWD raised its fiscal 2026 adjusted earnings guidance to $9.30-$9.50 per share from $9.15-$9.45. The company maintained its sales growth outlook of 20-23%, free cash flow forecast of $300-$350 million and capital expenditure plan of approximately $290 million. It expects to return about $700 million to shareholders for the full year. Aerospace sales are now expected to grow 21-23%, with a segment margin of about 23.5%. Industrial sales growth is projected at 19-21%, up from 18-20%, while segment margin is expected to reach roughly 19%. The adjusted effective tax rate forecast increased to approximately 22.5%. Woodward currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Teledyne Technologies Inc. TDY reported second-quarter 2026 adjusted earnings of $6.28 per share, which surpassed the Zacks Consensus Estimate of $5.78 by 8.7%. The bottom line also improved 20.8% from $5.20 recorded in the year-ago quarter. Total sales were $1.66 billion, which beat the Zacks Consensus Estimate of $1.57 billion by 5.9%. The top line also jumped 9.8% from $1.51 billion reported in the year-ago quarter. This improvement was driven by higher year-over-year sales across all business segments. America Movil, S.A.B. de C.V. AMX reported net income per ADR of 47 cents for the second quarter of 2026, up from 38 cents in the prior-year quarter. The earnings figure missed the Zacks Consensus Estimate of 52 cents. Total quarterly revenues rose 3.1% to Mex$241,071 million, driven by rapid momentum across the Service and Equipment segments. BlackBerry Limited BB reported first-quarter fiscal 2027 non-GAAP earnings per share of 4 cents. The figure beat the company’s estimate of 2-3 cents. In the year-ago quarter, it reported a non-GAAP EPS of 2 cents. The Zacks Consensus Estimate was pegged at 3 cents per share. BlackBerry generated $152.9 million in fiscal first-quarter revenue, representing 26% year-over-year growth. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report America Movil, S.A.B. de C.V. Unsponsored ADR (AMX) : Free Stock Analysis Report Teledyne Technologies Incorporated (TDY) : Free Stock Analysis Report Woodward, Inc. (WWD) : Free Stock Analysis Report BlackBerry Limited (BB) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Raising Earnings Guidance Based on Strong Third Quarter and Confidence in the Fourth Quarter FORT COLLINS, Colo., July 29, 2026 (GLOBE NEWSWIRE) -- Woodward, Inc. (NASDAQ:WWD) today reported financial results for its third quarter ended June 30, 2026. All amounts are presented on an as reported (U.S. GAAP) basis unless otherwise indicated. All per share amounts are presented on a fully diluted basis. All comparisons are made to the same period of the prior year unless otherwise stated. All references to years are references to the Company’s fiscal year unless otherwise stated. All percentages have been calculated using unrounded amounts. Third Quarter Overview “We delivered outstanding third quarter results, including significant sales growth and margin expansion in both segments,” said Chip Blankenship, Chairman and Chief Executive Officer. “In Aerospace, commercial services demand was resilient, while commercial OEM benefited from increasing aircraft production rates. Industrial sales and earnings performance was outstanding, with segment earnings growth of 86 percent driven by substantial sales growth across all primary markets. “Demand across our portfolio remains durable, and our teams continue to expand capacity, improve flow, and support customers. We are raising our full-year earnings guidance and remain focused on creating long-term value for shareholders through profitable growth, operational excellence, and innovation.” Segment earnings for the third quarter of 2026 were $170 million, or 24.0 percent of segment sales. The increase in segment earnings in the quarter was the result of price realization and increased leverage on higher sales volumes, partially offset by inflation and unfavorable mix. Segment earnings for the first nine months of fiscal 2026 were $476 million, or 23.3 percent of segment sales. The increase in segment earnings in the first nine months of the fiscal year was the result of price realization and increased leverage on higher sales volumes, partially offset by strategic investments in manufacturing capabilities, inflation, and unfavorable mix. Industrial segment earnings for the third quarter of 2026 were $88 million, or 22.1 percent of segment sales. Industrial segment earnings for the first nine months of 2026 were $221 million, or 19.2 percent of segment sales. The increase in segment earnings in both periods was primarily driven by increased leverage on higher sales volume and price realization, partially offset by inflation. Conference Call Woodward will hold an investor conference call at 5:00 p.m. ET on July 29, 2026, to provide an overview of the financial performance for its third quarter ended June 30, 2026, business highlights, and guidance for fiscal year 2026. You are invited to listen to the live webcast of our conference call, or a recording, and view or download accompanying presentation slides at our website, www.woodward.com2. You may also listen to the call by dialing + 1 (833) 461-5787 (U.S. domestic) or + 1 (585) 542-9983 (international). Participants should call prior to the start time to allow for registration; the Conference ID is 180 854 471. The call and presentation will be available on the website by selecting “Investors/Events & Presentations” from the menu and will remain accessible on the Company’s website for one year. About Woodward, Inc.Woodward is the global leader in the design, manufacture, and service of energy conversion and control solutions for the aerospace and industrial equipment markets. Our purpose is to design and deliver energy control solutions our partners count on to power a clean future. Our innovative fluid, combustion, electrical, propulsion and motion control systems perform in some of the world’s harshest environments. Woodward is a global company headquartered in Fort Collins, Colorado, USA. Visit our website at www.woodward.com. Cautionary Statement This release contains forward-looking statements regarding future events and Woodward’s future results within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are statements that are deemed forward-looking statements. These statements are based on current expectations, estimates, forecasts, and projections about the industries in which we operate and the beliefs and assumptions of management. Words such as “anticipate,” “believe,” “estimate,” “seek,” “goal,” “expect,” “forecast,” “intend,” “continue,” “outlook,” “plan,” “project,” “target,” “strive,” “can,” “could,” “may,” “should,” “will,” “would,” variations of such words, and similar expressions are intended to identify such forward-looking statements. In addition, forward-looking statements may include statements that refer to projections of our future performance, guidance measures, market dynamics, strategies, strategic focus areas, trends in our businesses and markets, other events or developments, or other non-historical matters. These forward-looking statements are not guarantees of future performance and are subject to several factors, risks, and uncertainties, the impact or occurrence of which could cause actual results to differ materially from the expected results described in the forward-looking statements. Factors that could cause actual results and the timing of certain events to differ materially from the forward-looking statements include, but are not limited to: (1) global economic uncertainty and instability, including in the financial markets that affect Woodward, its customers, and its supply chain; (2) risks related to constraints and disruptions in the global supply chain and labor markets; (3) Woodward’s long sales cycle; (4) risks related to Woodward’s concentration of revenue among a relatively small number of customers; (5) Woodward’s ability to implement and realize the intended effects of any restructuring efforts; (6) Woodward’s ability to successfully manage competitive factors including expenses and fluctuations in sales, as well as innovation and new product development; (7) changes and consolidations in the aerospace market; (8) Woodward’s financial obligations including debt obligations and tax expenses and exposures; (9) risks related to Woodward’s U.S. government contracting activities including potential changes in government spending patterns; (10) volatility with respect to the China on-highway natural gas truck market; (11) Woodward’s ability to protect its intellectual property rights and avoid infringing the intellectual property rights of others; (12) changes in the estimates of fair value of reporting units or of long-lived assets; (13) environmental risks; (14) Woodward’s continued access to a stable workforce and favorable labor relations with its employees, including its ability to retain key personnel or attract and retain new qualified personnel; (15) Woodward’s ability to manage various regulatory and legal matters; (16) risks from operating internationally; (17) cybersecurity, data privacy, and other technological risks; and other risk factors and risks described in Woodward's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended September 30, 2025, any subsequently filed Quarterly Report on Form 10-Q. The forward-looking statements contained in this press release are made as of the date hereof and Woodward assumes no obligation to update such statements, except as required by applicable law. Presented in the line item "Other income, net" in Woodward's Condensed Consolidated Statement of Earnings. Presented in the line item "Selling, general, and administrative expenses" in Woodward's Condensed Consolidated Statement of Earnings. 1Adjusted and Non-U.S. GAAP Financial Measures: Adjusted net earnings, adjusted earnings per share, adjusted income tax expense, adjusted effective tax rate, adjusted EBIT, adjusted EBITDA, and adjusted nonsegment expenses exclude, as applicable, (i) product rationalization, (ii) costs related to business development activities, and (iii) restructuring charges. The product rationalization adjustment pertains to the elimination and divestiture of certain product lines. The Company believes that these excluded items are short‐term in nature, not directly related to the ongoing operations of the business, and therefore, the exclusion of them illustrates more clearly how the underlying business of Woodward is performing. Guidance with respect to non-U.S. GAAP measures as provided in this release excludes, as applicable, restructuring charges. EBIT (earnings before interest and taxes), adjusted EBIT, EBITDA (earnings before interest, taxes, depreciation and amortization), adjusted EBITDA, adjusted net earnings, adjusted earnings per share, adjusted income tax expenses, adjusted effective tax rate, adjusted nonsegment expenses, EBITDA leverage, and free cash flow are financial measures not prepared and presented in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). Management uses EBIT and adjusted EBIT to evaluate Woodward’s operating performance without the impacts of financing and tax related considerations. Management uses EBITDA and adjusted EBITDA in evaluating Woodward’s operating performance, making business decisions, including developing budgets, managing expenditures, forecasting future periods, and evaluating capital structure impacts of various strategic scenarios. EBITDA leverage is calculated by taking a rolling twelve-month EBITDA divided by total debt. Management uses EBITDA leverage to assess Woodward’s earnings capacity relative to its total debt, monitor financial flexibility, evaluate capital structure impacts of strategic scenarios, and assist in capital allocation decisions. Management also uses free cash flow, which is derived from net cash provided by or used in operating activities less payments for property, plant, and equipment in reviewing the financial performance of Woodward’s business segments and evaluating cash generation levels. Securities analysts, investors, and others frequently use EBIT, EBITDA and free cash flow in their evaluation of companies, particularly those with significant property, plant, and equipment, and intangible assets that are subject to amortization. The use of any of these non-U.S. GAAP financial measures is not intended to be considered in isolation of, or as a substitute for, the financial information prepared and presented in accordance with U.S. GAAP. Because adjusted net earnings, adjusted earnings per share, EBIT, EBITDA, adjusted EBIT, adjusted EBITDA, and EBITDA leverage exclude certain financial information compared with net earnings, the most comparable U.S. GAAP financial measure, users of this financial information should consider the information that is excluded. Free cash flow does not necessarily represent funds available for discretionary use and is not necessarily a measure of our ability to fund our cash needs. Management’s calculations of EBIT, EBITDA, adjusted net earnings, adjusted earnings per share, adjusted EBIT, adjusted EBITDA, adjusted effective tax rate, adjusted nonsegment expenses, EBITDA leverage and free cash flow may differ from similarly titled measures used by other companies, limiting their usefulness as comparative measures. 2Website, Social Media: Woodward has used, and intends to continue to use, its Investor Relations website, its Facebook page, and LinkedIn as means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. 3FY26 Adjusted EPS, Free Cash Flow, and Adjusted Effective Tax Rate: Information reconciling our FY26 adjusted EPS, free cash flow and adjusted effective tax rate guidance to the most directly comparable GAAP financial measures on a forward-looking basis is not available without unreasonable effort primarily due to the unpredictability of the individual components of the most directly comparable GAAP financial measure and the variability of items excluded from each such measure. Such information may have a significant, and potentially unpredictable, impact on our future financial results. Contact:Dan Provaznik Director, Investor [email protected]

Woodward (WWD) came out with quarterly earnings of $2.52 per share, beating the Zacks Consensus Estimate of $2.39 per share. This compares to earnings of $1.76 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +5.44%. A quarter ago, it was expected that this maker of cockpit controls and other equipment for the defense and aerospace markets would post earnings of $2 per share when it actually produced earnings of $2.27, delivering a surprise of +13.5%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Woodward, which belongs to the Zacks Aerospace - Defense Equipment industry, posted revenues of $1.11 billion for the quarter ended June 2026, missing the Zacks Consensus Estimate by 0.42%. This compares to year-ago revenues of $915.45 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Woodward shares have added about 35.8% since the beginning of the year versus the S&P 500's gain of 8.5%. While Woodward has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Woodward was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $2.47 on $1.12 billion in revenues for the coming quarter and $9.34 on $4.32 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Aerospace - Defense Equipment is currently in the top 29% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, CAE (CAE), has yet to report results for the quarter ended June 2026. The results are expected to be released on August 12. This civil and military flight simulator company is expected to post quarterly earnings of $0.17 per share in its upcoming report, which represents a year-over-year change of +13.3%. The consensus EPS estimate for the quarter has been revised 0.6% lower over the last 30 days to the current level. CAE's revenues are expected to be $821.35 million, up 3.5% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Woodward, Inc. (WWD) : Free Stock Analysis Report CAE Inc (CAE) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research