Woodward, Inc. (NASDAQ: WWD) reported first-quarter fiscal year 2026 results on February 2, 2026, with consolidated net sales of $996 million, up 29 percent year-over-year from $773 million in Q1 FY2025. Consolidated net earnings reached $134 million in Q1 FY2026, up 54 percent from $87 million in the prior year period. The company raised its full-year fiscal 2026 sales and earnings guidance based on first-quarter outperformance.
Market Capitalization
Woodward had a market capitalization of approximately $13-14 billion as of February 3, 2026.
Q1 FY2026 Results
Woodward reported consolidated net sales of $996 million for Q1 FY2026, representing 29 percent year-over-year growth. Consolidated net earnings totaled $134 million, compared to $87 million in Q1 FY2025, an increase of 54 percent. Operating cash flow reached $114 million, up $80 million from Q1 FY2025. Free cash flow totaled $70 million, up $69 million year-over-year.
Earnings before income taxes reached $169 million in Q1 FY2026, compared to $102 million in Q1 FY2025. The effective tax rate was 20.9 percent in Q1 FY2026, compared to 14.5 percent in Q1 FY2025. The increase in tax rate was due to prior year discrete tax benefits not recurring. EBIT for Q1 FY2026 totaled $179 million, up 59 percent year-over-year.
Segment Performance
The Aerospace segment reported Q1 FY2026 sales of $635 million, up 29 percent from $494 million in Q1 FY2025. Segment earnings reached $148 million with a segment margin of 23.4 percent, compared to 19.2 percent in the prior year period. Commercial OEM sales grew 22 percent to $188 million, Commercial services increased 50 percent to $245 million, Defense OEM sales rose 23 percent to $138 million, and Defense services were up 1 percent to $64 million.
The Industrial segment reported Q1 FY2026 sales of $362 million, up 30 percent from $279 million in Q1 FY2025. Segment earnings totaled $67 million with a segment margin of 18.5 percent, compared to 14.4 percent in the prior year period. Transportation sales increased 55 percent to $166 million, Power generation sales rose 7 percent to $123 million, and Oil and gas sales grew 28 percent to $72 million.
Fiscal Year 2026 Guidance
Based on first-quarter outperformance, Woodward raised its fiscal 2026 guidance. The company now projects full-year sales growth of 14 to 18 percent, up from prior guidance of 7 to 12 percent growth. Free cash flow is projected at $300 to $350 million, consistent with prior guidance. Capital expenditures are expected to be approximately $290 million.
For the Aerospace segment, revised guidance projects sales growth of 15 to 20 percent, up from 9 to 15 percent. Segment earnings margin is expected to be 22 to 23 percent. For the Industrial segment, revised guidance projects sales growth of 11 to 14 percent, up from 5 to 9 percent. Segment earnings margin is expected to expand to 16 to 17 percent, up from prior guidance of 14.5 to 15.5 percent.
Quarterly Net Sales Trend
3-Month Trading Volume Trend
Business and Operations Update
Woodward is the global leader in the design, manufacture, and service of energy conversion and control solutions for the aerospace and industrial equipment markets. The company serves customers in commercial aerospace, defense, power generation, transportation, and oil and gas sectors. First-quarter performance benefited from operational excellence initiatives and increased output across the manufacturing portfolio.
Woodward is executing focused efforts on supply chain alignment to support stable inventory levels and predictable component availability. The company is implementing improved inventory management and pursuing capacity expansion efforts to meet sustained demand. Increased services offerings across both segments are contributing to revenue growth and margin expansion.
Strategic Developments
Woodward continues to execute its strategic capital allocation strategy, which includes investments in operational excellence and targeted innovation. The company returned $146 million to shareholders through dividends of $17 million and share repurchases of $129 million in the first quarter. Capital expenditures of $44 million were deployed to support growth initiatives and operational improvements.
Woodward is executing its determination to wind-down its China on-highway natural gas truck business. The company maintains focus on core growth markets in commercial aerospace, defense, and industrial applications where it holds differentiated market positions.
Outlook
Woodward expects sustained growth throughout fiscal 2026 based on strong demand across aerospace and industrial end markets. The company anticipates continued margin expansion driven by price realization, favorable product mix, and operational efficiency gains. What to watch for includes execution of supply chain stabilization efforts, successful capacity expansion initiatives, and the impact of ongoing restructuring.
The company assumes continued strong demand in commercial aerospace services, robust defense OEM demand, and growth in transportation and power generation. Woodward expects to deliver sustained profitable growth through operational excellence, targeted innovation, and disciplined capital allocation.
Performance Summary
Woodward reported Q1 FY2026 net sales of $996 million, up 29 percent year-over-year. Net earnings reached $134 million, a 54 percent increase from the prior year period. The Aerospace segment grew 29 percent to $635 million in sales with 23.4 percent margins; the Industrial segment grew 30 percent to $362 million with 18.5 percent margins. Operating cash flow totaled $114 million with free cash flow of $70 million. Woodward raised fiscal 2026 sales growth guidance to 14-18 percent and raised free cash flow projections. The company returned $146 million to shareholders through capital returns.