Woodward's Q3 2025 Earnings Call: Unpacking Contradictions in Aerospace and Defense Dynamics

Aerospace aftermarket growth and market dynamics, defense OE and aftermarket performance, marine transportation backlog and demand dynamics, defense OE as the fastest-growing end market, and aerospace aftermarket growth expectations are the key contradictions discussed in Woodward's latest 2025Q3 earnings call.



Revenue and Earnings Growth:
- Woodward reported record sales of $915 million for Q3 2025, up 8% year-over-year, with earnings per share at $1.76, up 8% year-over-year.
- The growth was driven by robust demand across both its Aerospace and Industrial segments, disciplined execution, and safety improvements.

Aerospace Segment Performance:
- The Aerospace segment saw record sales of $596 million, up 15% year-over-year, with margins expanding by 140 basis points to 21.1%.
- This performance was attributed to increased demand for defense OEM programs, strong sales in smart defense, and sustained growth in commercial services.

Industrial Segment Dynamics:
- Industrial segment sales were $319 million, down 3%, primarily due to a significant decline in China on-highway sales.
- However, excluding China on-highway and combustion products, Industrial sales grew by 9%, driven by oil and gas, marine transportation, and power generation segments.

Strategic Investments and Acquisitions:
- Woodward invested in a new manufacturing facility for the Airbus A350 spoiler control actuators, expected to cost hundreds of millions and support long-term growth.
- The acquisition of Safran's North American electromechanical actuation business was completed, strategically positioning Woodward in horizontal stabilizer trim actuation technology for key platforms.