Woodward 2025 Q3 Earnings Strong Performance as Net Income Grows 6%

Woodward (WWD) reported its fiscal 2025 Q3 earnings on Jul 30th, 2025. The company exceeded expectations this quarter, showcasing an 8% increase in total revenue and a 6.2% growth in net income. Woodward also raised its full-year sales and earnings guidance, reflecting confidence in its market strategy and performance. However, the company revised its free cash flow expectations downward due to challenges in supply chain and production dynamics. This adjustment highlights Woodward's strategic focus on long-term growth while navigating operational complexities.

Revenue
The total revenue of Woodward rose 8% year-over-year, reaching $915.45 million in Q3 2025, compared to $847.69 million in Q3 2024.

Earnings/Net Income
Woodward's EPS increased by 7.7%, reaching $1.82 in 2025 Q3 compared to $1.69 in 2024 Q3. The company also saw net income rise to $108.45 million, marking a 6.2% growth from the previous year's $102.08 million. The EPS growth indicates positive earnings performance.

Post-Earnings Price Action Review
Woodward's post-earnings strategy of buying shares when earnings exceed expectations and holding for 30 days proved highly successful, generating a remarkable return of 260.85%. This performance significantly outpaced the benchmark return of 87.61%, resulting in an excess return of 173.24%. The strategy demonstrated a compound annual growth rate (CAGR) of 29.47%, showcasing its effectiveness in managing risk while delivering robust returns. Notably, the strategy achieved a maximum drawdown of 0.00%, a Sharpe ratio of 0.86, and exhibited a volatility of 34.43%. These metrics reflect the strategy's ability to balance risk and reward effectively, contributing to Woodward's strong post-earnings performance.

CEO Commentary
"We delivered strong results in the third quarter underpinned by robust demand across our end markets, coupled with disciplined execution by our global teams," said Chip Blankenship, Chairman and Chief Executive Officer. The Aerospace segment experienced substantial sales growth and margin expansion, driven by smart defense and commercial services, despite lower commercial OEM and defense services. The Industrial business achieved double-digit sales growth in oil and gas and marine transportation, although this was partially offset by a decrease in China on-highway natural gas truck sales. The focus remains on growth, operational excellence, and innovation to deliver sustained long-term shareholder value.

Guidance
Based on strong year-to-date performance and a solid fourth quarter outlook, the company is raising its full-year sales and earnings guidance. However, due to the demands of supporting higher sales in a dynamic supply chain and production environment, the full-year free cash flow guidance has been lowered. The leadership remains committed to positioning Woodward for growth and operational excellence.

Additional News
In recent developments, Woodward completed the acquisition of Safran's North American electromechanical actuation business, strengthening its position in aerospace technology. This strategic move is expected to enhance Woodward's capabilities and expand its market presence. Additionally, Woodward announced the declaration of dividends and returned over $62 million to shareholders in Q3 2025, including $45 million in share repurchases and $17 million in dividends. These actions underscore the company's commitment to shareholder value. Furthermore, Woodward was selected by Airbus to supply the hydraulic A350 spoiler actuation system, marking a significant achievement and aligning with its long-term growth strategy in aerospace.