Woodward 1Q profit falls

FORT COLLINS – Woodward Inc.’s first-quarter earnings slipped to $23.4 million from $27.4 million during the same period a year earlier on lower defense sales.

The Fort Collins-based energy and aerospace company’s first-quarter net sales totaled $429 million vs. $408 million during the first quarter of the last fiscal year. Woodward’s first quarter of 2014 ran from Oct. 1 through Dec. 31.

Net sales from Woodward’s aerospace segment totaled $229.9 million, up from $211.4 million during the same period a year ago. Aerospace earnings amounted to $22.5 million, down from $31.6 million. The earnings decline came from lower defense aftermarket and original equipment manufacturing sales.

First-quarter energy segment sales totaled $199.2 million, a slight increase from $197 million during last year’s first quarter. Energy earnings hit $27.1 million, up from $23.9 million. Higher energy earnings came from manufacturing productivity gains.

Woodward also reported non-segment expenses of $10.7 million during the first quarter. The company had total debt of $594 million as of Dec. 31 vs. $550 million Sept. 30.

“Energy markets appeared to be firming,” CEO Tom Gendron said during an earnings conference call. “Commercial aerospace remains strong while defense aerospace sales were weak.”

Defense sales declined by $25 million, a 28-percent drop, as some of the company’s programs ended as well as the timing of certain contracts, Chief Financial Officer Bob Weber said. Woodward executives said last year that they anticipated a first-quarter dip in defense sales.

“We anticipate some recovery from this first quarter, but we don’t think we can recover the entire quarter,” Weber said. “We’re now looking at about a 10-percent overall decline in defense in total for the year.”

Gendron also pointed out that the first quarter was a “low sales quarter” due to fewer working days during the holidays. He added that the company would see a stronger second half of fiscal 2014 as it fills orders.

Woodward shares, which trade on the Nasdaq exchange under the symbol WWD, closed 3.5 percent down at $44.61.

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