Woodward delivered a fourth quarter that exceeded Wall Street’s expectations, with management crediting robust demand in both its aerospace and industrial segments as primary drivers. CEO Charles P. Blankenship emphasized that “commercial services activity was robust across narrow-body, wide-body, and regional platforms,” and highlighted operational improvements that enabled the company to capitalize on strong order flow. Management also pointed to margin expansion in both segments, attributing this to a combination of pricing, higher volumes, and favorable mix, especially in commercial aerospace services and industrial power generation.
Is now the time to buy WWD? Find out in our full research report (it’s free for active Edge members).
Woodward (WWD) Q4 CY2025 Highlights:
- Revenue: $996.5 million vs analyst estimates of $890.1 million (29% year-on-year growth, 11.9% beat)
- EPS (GAAP): $2.17 vs analyst estimates of $1.68 (29.5% beat)
- Adjusted EBITDA: $207.8 million vs analyst estimates of $167.8 million (20.9% margin, 23.9% beat)
- EPS (GAAP) guidance for the full year is $8.40 at the midpoint, beating analyst estimates by 3.5%
- Operating Margin: 16%, up from 11.6% in the same quarter last year
- Organic Revenue rose 29% year on year (beat)
- Market Capitalization: $23.16 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Woodward’s Q4 Earnings Call
- Scott Mikus (Melius Research) asked if the strong aftermarket sales in Q4 would be the low point for the year; CEO Charles Blankenship replied that while spare LRU sales may moderate, growing repair and spare parts demand could offset declines.
- Scott Deuschle (Deutsche Bank) questioned why higher aftermarket mix did not further boost margin guidance; CFO William F. Lacey explained increased OEM sales will temper the margin rate for the remainder of the year.
- Noah Poponak (Goldman Sachs) inquired if the full-year guidance revision mostly reflected Q4 outperformance; Lacey confirmed that most upside was from the quarter, with less expectation of repeat drivers like China on-highway and spare LRU sales.
- Gavin Parsons (UBS Financial) asked about capacity constraints and productivity initiatives; Blankenship highlighted ongoing investments at Prestwick and Rockford to expand capacity and improve operational flow.
- Louis Raffetto (Wolfe Research) probed the rationale for holding free cash flow guidance flat; Lacey said higher working capital needs, particularly inventory, necessitated a cautious approach to free cash flow targets.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be watching (1) the pace and impact of service capacity expansions and facility upgrades, (2) the execution of the China on-highway wind-down and its effect on industrial margins, and (3) progress in resolving supply chain bottlenecks to support customer deliveries. Additional attention will be paid to new service partnerships and ongoing automation projects as potential drivers of future growth.
Woodward currently trades at $388.92, up from $327.25 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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