Shares of Woodward Drop on Guidance Cut
Aerospace and defense components supplier Woodward (NYSE: WWD) slashed its full-year earnings forecast after higher costs and lower-than-expected aerospace sales hurt second-quarter results, sending its shares down 16 percent early on Monday.
After closing the previous trading session at $36.05, Woodward gapped down Monday morning with an opening price of $30.19. In the afternoon, shares were down 7.5%, trading on volume near 320,000. The stock has lost momentum over the last three months, losing nearly $7.80 (about 19%) from nearly reaching $42 by mid-April, 2012. Today the stock traded at 87.7% of its 50-day moving average and 82.8% of its 200-day moving average. Woodward had a low today of 30.19 and was trading at 33.72 by mid-day.
A spike in product development and process investments, and lower sales volumes created "unanticipated" earnings pressure in the third quarter, Woodward said in a statement.
Woodward, which supplies cockpit controls, air valves, fuel systems, actuators, and motors to aircraft makers said it expects to make between $1.90 and $2.00 per share as compared to its prior view of $2.20 to $2.35 per share. The Street was expecting $2.25 per share.
Woodward did announce a ten year deal with Caterpillar (NYSE: CAT), but it was not enough to appease investor concerns regarding rising product development costs and lower sales volumes.
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