Woodward Shares Surge on Upgraded Full-Year Outlook

Woodward US9807451037

A robust first-quarter performance for fiscal 2026 has propelled Woodward into the new financial year with significant momentum. The company's decision to substantially raise its annual guidance following these results has injected a wave of optimism among investors, raising questions about its ability to sustain this accelerated pace.

• Q1 Revenue: $996 million (a 29% year-over-year increase)
• Earnings Per Share (EPS): $2.17 (compared to $1.42 in the prior year)
• Revised FY 2026 Revenue Guidance: Growth of 14% to 18% (up from prior projection of 7% to 12%)
• Revised FY 2026 EPS Guidance: $8.20 to $8.60 (raised from $7.50 to $8.00)
• Dividend: Increased by 14% to $0.32 per share

Strong Start Driven by Dual Segments

Woodward's operational strength was underscored by a 53% jump in adjusted earnings per share to $2.17, on the back of a 29% revenue climb to $996 million. This powerful start notably defied the typical seasonal softness often seen at the beginning of the company's fiscal year, with robust demand observed across both of its core business units.

The Aerospace segment served as the primary growth engine, with revenue advancing 29% to $635 million. This surge was largely fueled by a booming commercial aftermarket business, which expanded by an impressive 50% compared to the same quarter last year. Simultaneously, the Industrial segment demonstrated its own vigor, posting $361 million in revenue—a performance that prompted management to also upgrade its growth expectations for this division.

Revised Guidance and Strategic Focus

In direct response to the quarter's strength, Woodward's leadership has elevated its targets for the full 2026 fiscal year. The company now anticipates revenue growth as high as 18%, a significant uplift from its previous top-end forecast of 12%. The benchmark for profitability has also been raised considerably with the new EPS guidance. Market observers view the strategic move to wind down the On-Highway operations in China as a deliberate step to sharpen the company's focus on its higher-margin core activities.

Investors have already rewarded this positive development, driving the share price approximately 15% higher over the past week. Confidence in Woodward's long-term cash generation is further reflected in its capital allocation policy, with the board approving a 14% hike in the quarterly dividend to $0.32 per share.

Shareholders should note two key dates: the dividend will be payable on March 5, 2026, to those on record as of February 19.