Woodward beats estimates, shares surge

FORT COLLINS — Woodward Inc. (Nasdaq: WWD) shares surged nearly 8 percent Wednesday on higher earnings that beat analysts’ estimates following improvements in the aerospace and energy markets.

Fort Collins-based Woodward gained 3 points to close at $44.52 on Wednesday afternoon after reaching a high of $45.71 earlier in the day.

Woodward, which makes energy and aerospace control systems, reported earnings of $44.8 million for the second quarter ended March 31 after the market closed Tuesday. Woodward earned $42.4 million during the same quarter a year earlier.

The company posted $.66 in earnings per share during the second quarter, beating analysts’ estimates of $.50 per share. The higher second-quarter earnings per share came despite flat sales revenue of $482.5 million.

Woodward posted earnings of $23.4 million for the first quarter ended Dec. 31, down from $27.4 million the same period a year earlier.

“They bounced back really nicely quarter over quarter,´ said William Bremer, senior equity analyst for New York City-based Maxim Group.

Woodward CEO Tom Gendron said during Tuesday’s second-quarter earnings conference call that the company has seen growing strength in the regional jet market and an uptick in the commercial rotorcraft market. Next generation aircraft and airframe platforms will drive significant growth for Woodward in the future.

“In aerospace, it’s all about content and it’s all about the future,” Bremer said. “Even though these next generation of jets… are not out yet, (Woodward) has significantly more content on them. The market is starting to realize this.”

By the end of the year, margins will improve when Woodward delivers content for next generation aircraft, said Bremer, who has rated Woodward stock a “buy” with a price target of $50.

“The investments that they’ve made in the past have definitely paid dividends, and we’re starting to see that,” he said.

Woodward also saw solid natural-gas turbine sales as a result of strong demand from power generation markets, Gendron told analysts Tuesday. Additionally, the company saw solid demand for compressed natural-gas systems in buses and trucks.

The company expects stronger sales during the second half of the year, Gendron said. Woodward anticipates sales between $1.95 billion and $2.05 billion and earnings per share between $2.10 and $2.30 per share in fiscal 2014.


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