Why Woodward, Inc.Common Stock (NASDAQ: WWD) stock is falling

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Woodward, Inc.Common Stock (NASDAQ: WWD) stock fell over 6.2% in the pre market session of November 19th, 2019 (as of 7:01 am GMT-5; Source: Google finance) after the company posted lower than expected results for the third quarter of FY 19. The company has delivered the adjusted net earnings of $79 million compared to adjusted net earnings of $89 million for the prior year quarter. The company has generated net cash provided by operating activities for fiscal year 2019 of $391 million, compared to $299 million for the prior year.

WWD in the fourth quarter of FY 19 has reported the adjusted earnings per share of $1.22, missing the analysts’ estimates for the adjusted earnings per share of $1.29, according to analysts surveyed by Zacks Investment Research. The company had reported the adjusted revenue growth of 2 percent to $736.5 million in the fourth quarter of FY 19, beating the analysts’ estimates for revenue of $740.2 million.

Additionally, during FY 19, the company has returned $150 million to stockholders in the form of $40 million of dividends and $110 million of repurchased shares.

For fiscal 2020, the company expects total net sales to be in the range $3.0 and $3.1 billion. Aerospace sales are expected to be up abut 6 percent compared to the prior year. Industrial sales are projected to be flat to up low single digits as compared to the prior year. Aerospace segment earnings as a percent of segment net sales are anticipated to be about 21 percent. Industrial segment earnings as a percent of a net sales are anticipated to be about 14 percent. The effective tax rate is anticipated to be about 22 percent. Free cash flow is anticipated to be about $400 million. Earnings per share is expected to be in the range of $5.30 and $5.60 based on approximately 64 million of fully diluted weighted average shares outstanding.

In addition, for fiscal 2020, the company expects continued growth in the Aerospace business as the 737 MAX returns to service, defense is projected to remain strong in both OEM and aftermarket. And commercial aftermarket is anticipated to remain strong.

In the Industrial business, the company expects improved profitability in 2020 despite modest to flat revenue growth. The company expects improving gas turbine market dynamics and accelerating natural gas truck sales in Asia, which will be partially offset by slowing economic growth, China trade headwinds and softening oil and gas investments.

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