WWD · Woodward, Inc.

Woodward, Inc. delivered strong Q2 FY2026 results, with total net sales reaching $1,091 million, up 23% year-over-year, driven by robust demand across both Aerospace and Industrial segments. Aerospace sales grew 25% to $703 million, fueled by 36% growth in commercial services and 30% in commercial OEM, alongside defense gains, yielding segment earnings of $158 million at a 22.5% margin, up 30 basis points. Industrial sales increased 20% to $387 million, with transportation up 34%, power generation 7%, and oil & gas 18%, boosting segment earnings to $66 million at a 17.0% margin, a 270 basis point expansion. Management highlighted robust demand, strong execution, price realization, and higher volumes, partially offset by inflation, investments in manufacturing, R&D, and ERP upgrades; Industrial also noted a product performance reserve. Nonsegment expenses rose to $45 million. Net earnings of $134 million matched sales growth at +23%, with adjusted figures showing stronger +35% to $139 million and adjusted EPS of $2.27 (+34%). Cash from operations was $91 million (+17%), though free cash flow dipped to $38 million due to elevated capex of $53 million. Balance sheet strengthened with cash at $501 million and debt at $1.12 billion (1.4x EBITDA leverage). Confident in H2 outlook, Woodward raised FY2026 guidance: total sales growth to 20-23% (from 14-18%), Aerospace 21-24% with 23-23.5% margins, Industrial 18-20% with 18-18.5% margins, and adjusted EPS to $9.15-$9.45 (from $8.20-$8.60), maintaining FCF at $300-350 million and capex ~$290 million. CEO Chip Blankenship emphasized sustained profitable growth amid dynamic environment, underscoring shareholder returns via $226 million Q2 repurchases.