Q3 2024 Woodward Inc Earnings Call Transcript
Key Points
- Woodward Inc (WWD) reported a 6% increase in net sales for the third quarter of 2024, reaching $848 million.
- Aerospace segment sales grew by 8%, driven by a 19% increase in commercial aftermarket sales.
- The company achieved a 200 basis points margin expansion and generated approximately $90 million of incremental free cash flow.
- Woodward Inc (WWD) has invested in rapid complex machining centers to support suppliers and improve supply chain resilience.
- The company is making significant strides in innovation, including advanced hydraulic controls for Boeing's X-66 project and high-temperature fuel control systems for next-generation aircraft engines.
- Defense OEM sales decreased by 4%, and the China on-highway sales were flat compared to the prior year.
- The industrial segment experienced a 6% decrease in oil and gas sales, and the China on-highway orders are expected to decline further in Q4.
- Supply chain disruptions and late supplier deliveries are impacting the timing of cash collections and extending the timing to collect cash on planned deliveries.
- The company is facing challenges with inventory buildup due to lack of synchronization across the aerospace supply chain.
- Woodward Inc (WWD) revised its full-year 2024 guidance for industrial sales growth downward due to lower China on-highway orders.
Thank you for standing by. Welcome to the Woodward, Inc third-quarter FY2024 earnings call. At this time, I would like to inform you that this call is being recorded for rebroadcast. (Operator Instructions)
Joining us today from the company are Chip Blankenship, Chairman and Chief Executive Officer, Bill Lacey, Chief Financial Officer, and Dan Provaznik, Director of Investor Relations. I would now like to turn the call over to Dan Provaznik.
Thank you, operator. We'd like to welcome all of you to Woodward's third-quarter FY2024 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, and at the end of our presentation, we will take questions.
For those who have not seen today's earnings release, you can find it on our website at woodward.com. We have again included some presentation materials to go along with today's call that are also accessible on our website.
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