Woodward, Inc. Secures Major Airbus A350 Spoiler Actuation System Contract#
Woodward, Inc. (WWD recently announced a significant contract to supply the electro-hydraulic Spoiler Actuation System for the Airbus A350 aircraft. This strategic win, revealed at the 55th International Paris Airshow in June 2025, covers 12 of the 14 spoilers on the A350, a flagship wide-body aircraft known for its fuel efficiency and advanced aerodynamics. The deal also includes long-term maintenance and repair services, providing Woodward with recurring revenue streams and enhancing its aerospace segment's growth potential.
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The Airbus A350 backlog exceeds 700 aircraft, signaling sustained demand. Woodward's role as a key supplier for such a high-profile program strengthens its market position within aerospace control systems. This contract not only bolsters Woodward’s revenue prospects but also underscores its technological capabilities and reliability in delivering critical systems at scale.
Financial Impact and Growth Trajectory Supported by Strong Metrics#
Woodward’s recent fiscal year 2024 results illustrate the company's robust financial foundation underpinning this strategic partnership. The company reported $3.32 billion in revenue, marking a +14.06% year-over-year increase, with net income surging by +60.51% to $372.97 million (Monexa AI). Operating income rose to $428.3 million, improving operating margin to 12.88% from 10.45% in 2023, reflecting enhanced operational efficiency and scalability.
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Research and development expenses increased modestly to $140.68 million (4.19% of revenue), signaling continued investment in innovation crucial for aerospace control system competitiveness. Free cash flow also grew significantly by +47.74% to $342.81 million, supporting ongoing capital expenditures and shareholder returns.
Key Financial Performance Metrics#
| Metric | FY 2024 | FY 2023 | % Change |
|---|---|---|---|
| Revenue | $3.32B | $2.91B | +14.06% |
| Net Income | $372.97M | $232.37M | +60.51% |
| Operating Income | $428.3M | $304.71M | +40.58% |
| Gross Profit Margin | 26.37% | 23.25% | +3.12 pts |
| Operating Margin | 12.88% | 10.45% | +2.43 pts |
| Free Cash Flow | $342.81M | $232.04M | +47.74% |
| R&D Expense (% of Revenue) | 4.19% | 4.54% | -0.35 pts |
This growth trajectory aligns with the anticipated benefits of the Airbus A350 contract, which is expected to contribute to both initial sales and high-margin recurring maintenance revenues.
Competitive Landscape: Strengthening Position Amid Key Players#
Woodward operates in a competitive aerospace actuation systems market alongside companies like Honeywell, Parker Hannifin, and Moog. The Airbus A350 contract enhances Woodward’s competitive advantage by cementing its role as a trusted supplier to a leading OEM. This elevates Woodward’s market share and reputation for delivering reliable, technologically advanced control systems.
The contract’s inclusion of long-term maintenance services also differentiates Woodward by creating recurring revenue streams that competitors may find challenging to match. Woodward’s focus on innovation, supported by sustained R&D investment, and its expanding aerospace portfolio position it well against rivals in a market driven by stringent performance and safety standards.
Industrial Segment Complements Aerospace Growth#
Woodward’s industrial segment, encompassing automation, energy, and industrial controls, continues to contribute steadily to overall growth. This diversification reduces dependency on aerospace alone and balances revenue streams. Market trends favoring automation and energy efficiency align with Woodward’s industrial offerings, supporting sustained growth in this segment.
Recent financial data indicates the industrial segment benefits from expanding demand for smart and sustainable technologies. This segment’s steady performance bolsters Woodward’s resilience amid aerospace sector cyclicality and supply chain challenges.
Market Reaction and Stock Momentum#
Following the Airbus A350 contract announcement, Woodward’s stock has experienced positive momentum, reflecting investor confidence in its growth prospects. As of the latest close, WWD trades at $245.09, with a market capitalization of approximately $14.58 billion. The stock’s trailing P/E ratio stands at ~39.59x, consistent with expectations for a growth-oriented aerospace supplier.
Earnings surprises in recent quarters—such as the Q1 2025 earnings beating estimates with an EPS of $1.69 versus the $1.44 consensus—underscore Woodward’s operational strength and ability to capitalize on strategic contracts (Monexa AI).
Future Outlook and Analyst Consensus#
Analysts project continued revenue growth supported by the Airbus contract and ongoing industrial segment expansion. Forward P/E estimates show a gradual decline to ~27.71x by 2027, suggesting improving earnings visibility and potentially enhanced profitability.
| Year | Estimated Revenue | Estimated EPS | Forward P/E |
|---|---|---|---|
| 2025 | $3.46B | $6.34 | 37.03x |
| 2026 | $3.76B | $7.55 | 31.98x |
| 2027 | $4.04B | $9.12 | 27.71x |
| 2028 | $3.92B | $8.41 | 27.93x |
Increasing defense and aerospace spending globally, alongside Woodward’s innovation and service agreements, underpin this positive outlook.
What Does This Mean For Investors?#
Woodward’s Airbus A350 contract represents a critical catalyst for sustained aerospace segment growth, supported by strong financial performance and operational execution. The recurring revenue from maintenance services adds stability and margin enhancement potential.
The company’s balanced exposure to industrial markets provides diversification, mitigating sector-specific risks. Robust free cash flow generation and disciplined capital allocation, evidenced by consistent R&D spending and shareholder returns, indicate sound management execution.
Investors should note Woodward’s strong competitive positioning reinforced by strategic partnerships and technological innovation. While supply chain and client concentration risks remain, Woodward’s diverse portfolio and operational scale provide resilience.
Key Takeaways#
- Woodward’s Airbus A350 spoiler actuation contract secures a significant, long-term revenue stream with maintenance services.
- FY 2024 financials show strong revenue growth (+14.06%), improved margins, and substantial net income increase (+60.51%).
- Competitive positioning strengthened against peers through technological leadership and recurring revenue contracts.
- The industrial segment offers complementary growth and diversification benefits.
- Stock momentum supported by earnings beats and positive analyst revisions.
- Forward estimates indicate sustainable growth and improving profitability over the next several years.
Sources#
- Woodward Selected by Airbus as Supplier for the Hydraulic A350 Spoiler Actuation System
- Woodward Wins Key Airbus A350 Contract for Spoiler Actuation System
- Woodward to Supply A350 Spoiler Actuation System for Airbus
- Woodward Press Release: Supplier for Airbus A350
- Nasdaq: Woodward Secures Major Airbus A350 Contract