Woodward Q4 2009 Earnings Conference Call Transcript - Thomson StreetEvents

Woodward Q4 2009 Earnings Conference Call Transcript

Woodward Q4 2009 Earnings Conference Call Transcript - Thomson StreetEvents
Woodward Q4 2009 Earnings Conference Call Transcript
Published Nov 18, 2009
Published Nov 18, 2009
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Abstract:

Final Transcript of WGOV earnings conference call or presentation, 18-Nov-09 5:00pm ET

  
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Transcript

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WGOV
Time
5:00pm ET
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The following is excerpted from the question-and-answer section of the transcript.

(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)

Question: Tyler Hojo - Sidoti & Company - Analyst: Hey, good morning, guys -- or good evening. Wow, boy.

Answer By: Thomas Gendron - Woodward - President & CEO


Question: Tyler Hojo - Sidoti & Company - Analyst: I wish, I guess. Hey, just if we could start on -- just on the guidance. Is it possible to kind of parse that out just in regards to what your expectations are for the individual business segments?

Answer By: Robert Weber - Woodward - CFO & Treasurer


Question: Tyler Hojo - Sidoti & Company - Analyst: No, that's helpful. And then, I mean, would you characterize kind of your outlook that you've provided here as, perhaps, a little bit more pessimistic than, perhaps, your end customers, GE and Caterpillar ?

Answer By: Robert Weber - Woodward - CFO & Treasurer

Answer By: Thomas Gendron - Woodward - President & CEO


Question: Tyler Hojo - Sidoti & Company - Analyst: Yes, that's -- I mean --

Answer By: Thomas Gendron - Woodward - President & CEO


Question: Tyler Hojo - Sidoti & Company - Analyst: Okay. And just one last thing for me and I'll hop back in the queue. I'm a little bit confused as to why you are moving the steam turbines from the Engine to Turbine? Could you just give a little bit more detail there?

Answer By: Thomas Gendron - Woodward - President & CEO


Question: Tyler Hojo - Sidoti & Company - Analyst: Okay, and I mean, is that really -- I mean, if you just look sequentially, is that basically coming out of engine? Is that really the bulk of kind of the margin differential that you saw sequentially, or how does one think about that?

Answer By: Thomas Gendron - Woodward - President & CEO


Question: Tyler Hojo - Sidoti & Company - Analyst: I'll hop back into queue. Thanks a lot. Operator - Woodward Our next question comes from the Fred Buonocore from CJS Securities.


Question: Fred Buonocore - CJS Securities - Analyst: Hi, yes. Good evening, gentlemen.

Answer By: Thomas Gendron - Woodward - President & CEO


Question: Fred Buonocore - CJS Securities - Analyst: I kind of wanted to drill down into the Electrical Power Systems profitability during the quarter. It just seems like -- excuse me -- kind of a pretty huge decline, even with the volume decline. Can you talk a little bit about -- I think you got into some detail in the call, and if you could review that with me in terms of what the major factors were, and was it -- did it have something to do with -- that the mix got worse as the wind turbine inverters, which I believe have been at higher margins, sort of declined? Could you give a little more detail on that, please?

Answer By: Robert Weber - Woodward - CFO & Treasurer


Question: Fred Buonocore - CJS Securities - Analyst: Got you. And Electric Power Systems was one of the segments that you indicated you probably see sequential declines through the first half on the revenue side, correct?

Answer By: Robert Weber - Woodward - CFO & Treasurer


Question: Fred Buonocore - CJS Securities - Analyst: But even with those marginal declines through the first half, we could be -- with the start-up behind us, or moving behind us, we could see the margins come back up in that area?

Answer By: Robert Weber - Woodward - CFO & Treasurer


Question: Fred Buonocore - CJS Securities - Analyst: Got it. Okay. And then I wanted to move over to the mix on the turbine side. You talked about that your aftermarket aerospace, aftermarket was actually flattish to maybe seeing some pickup. Just in general and as we move here into Q1, are you starting to see increasing momentum on that after-market business? I mean, some other aerospace aftermarket businesses have been talking about continuing to go suffer from inventory compression and such, but that doesn't seem to be really what you're experiencing.

Answer By: Thomas Gendron - Woodward - President & CEO


Question: Fred Buonocore - CJS Securities - Analyst: Right.

Answer By: Thomas Gendron - Woodward - President & CEO


Question: Fred Buonocore - CJS Securities - Analyst: Got it. And then finally just on the Airframe Systems margins, you've talked about reaching a mid-teens margin, maybe kind of by the end of your fiscal 2010. Does it look like maybe you're meeting your objectives faster than you had expected and that that margin goal could be achieved sooner than, say, Q4?

Answer By: Thomas Gendron - Woodward - President & CEO


Question: Fred Buonocore - CJS Securities - Analyst: Great. Thank you very much. Operator - Woodward (Operator Instructions). Our next question comes from Peter Lisnic from Robert W. Baird.


Question: Josh Chan - Robert W. Baird - Analyst: Good afternoon. This is actually Josh [Chan] filling in for Pete.

Answer By: Robert Weber - Woodward - CFO & Treasurer


Question: Josh Chan - Robert W. Baird - Analyst: Could you talk about some of your moving parts on your margin in 2010 versus 2009? I mean, it sounds like you have a better aftermarket mix but maybe volume could be a little pressured. What are you thinking in terms of margin?

Answer By: Robert Weber - Woodward - CFO & Treasurer


Question: Josh Chan - Robert W. Baird - Analyst: Okay. Could you talk about, also, the industrial gas turbine market? I mean, I think previously you said that the seller aftermarket could somewhat offset the OE? Is that still accurate, or do you think OE has gotten a little weaker than you thought?

Answer By: Thomas Gendron - Woodward - President & CEO


Question: Josh Chan - Robert W. Baird - Analyst: Okay. And then finally, did you give interest expense estimate for next year?

Answer By: Robert Weber - Woodward - CFO & Treasurer


Question: Josh Chan - Robert W. Baird - Analyst: Right, right. All right, thanks for your time . Operator - Woodward Our next question comes from J.B. Groh from D.A. Davidson.


Question: Chris Denney - D.A. Davidson - Analyst: Hi, guys. This is actually Chris [Denney] in for J.B.

Answer By: Thomas Gendron - Woodward - President & CEO


Question: Chris Denney - D.A. Davidson - Analyst: I had a quick question. What kind of tax rate are you guys forecasting for 2010?

Answer By: Robert Weber - Woodward - CFO & Treasurer


Question: Chris Denney - D.A. Davidson - Analyst: About 32%? And then with your acquisitions, I don't know if you guys have ever talked about this before, but what kind of percentage of revenues is business jet now?

Answer By: Thomas Gendron - Woodward - President & CEO

Answer By: Robert Weber - Woodward - CFO & Treasurer


Question: Chris Denney - D.A. Davidson - Analyst: Okay. And then is the weakness in wind, is that coming pretty much from European markets?

Answer By: Thomas Gendron - Woodward - President & CEO


Question: Chris Denney - D.A. Davidson - Analyst: Is North America going to kind of lag Europe in terms of that?

Answer By: Thomas Gendron - Woodward - President & CEO


Question: Chris Denney - D.A. Davidson - Analyst: Okay. Great .

Answer By: Robert Weber - Woodward - CFO & Treasurer


Question: Tyler Hojo - Sidoti & Company - Analyst: Hey, guys, what level of aftermarket business is the -- are the two acquired businesses running at -- the Airframe Systems business?

Answer By: Thomas Gendron - Woodward - President & CEO

Answer By: Robert Weber - Woodward - CFO & Treasurer


Question: Tyler Hojo - Sidoti & Company - Analyst: Okay, so backing out the purchasing -- purchase accounting in the quarter, you are basically already in that range where you thought you could be?

Answer By: Robert Weber - Woodward - CFO & Treasurer


Question: Tyler Hojo - Sidoti & Company - Analyst: So I guess what I'm trying to understand is, was there some favorable mix this quarter that you don't expect to either -- I mean, just given that you think aftermarket mix basically doubles from kind of the level it's running at right now?

Answer By: Thomas Gendron - Woodward - President & CEO


Question: Tyler Hojo - Sidoti & Company - Analyst: Okay.

Answer By: Robert Weber - Woodward - CFO & Treasurer


Question: Tyler Hojo - Sidoti & Company - Analyst: Okay. That's fair. And then I just want to drill down a little bit more on the wind business. Obviously you've made the investment in Colorado in the facility. But I guess, maybe if you could maybe just comment on kind of in-roads with some domestic piece wind turbine manufacturers, and what -- how far out you think you are from perhaps winning that market share?

Answer By: Robert Weber - Woodward - CFO & Treasurer


Question: Tyler Hojo - Sidoti & Company - Analyst: Okay. That's helpful. And then just on CapEx, can you maybe talk about some of the investments that you're planning on making this fiscal year, and just -- I mean, obviously, you have the acquired businesses, but just curious as to what some of the key things on the list there are?

Answer By: Robert Weber - Woodward - CFO & Treasurer


Question: Tyler Hojo - Sidoti & Company - Analyst: Great. Thanks a lot.

Answer By: Robert Weber - Woodward - CFO & Treasurer


Question: Peter Mahan - Daugherty - Analyst: Hey, guys, just one quick question. I just wanted to get your -- kind of your thoughts around your appetite for further acquisitions. To me, after you did the HR Textron and the MPC acquisition, it would make sense that maybe your next focus might be in the wind side of things, or maybe you're filling out your actuation portfolio with some electronic technology -- or electric technology. Could I get your thoughts around that?

Answer By: Thomas Gendron - Woodward - President & CEO


Question: Peter Mahan - Daugherty - Analyst: Okay. Great. Thanks, guys. Operator - Woodward I'm showing no further questions at this time. I'd like to turn the call back over to Mr. Gendron for any closing remarks.

Answer By: Thomas Gendron - Woodward - President & CEO

Table Of Contents

Woodward Q4 2010 Earnings Conference Call Transcript – 2010-11-16 – $54.00 – Final Transcript of WGOV earnings conference call or presentation, 16-Nov-10 4:30pm ET

Woodward Q3 2010 Earnings Conference Call Transcript – 2010-07-28 – $54.00 – Final Transcript of WGOV earnings conference call or presentation, 28-Jul-10 4:30pm ET

Woodward Q2 2010 Earnings Conference Call Transcript – 2010-04-22 – $54.00 – Final Transcript of WGOV earnings conference call or presentation, 22-Apr-10 5:00pm ET

Woodward Q1 2010 Earnings Conference Call Transcript – 2010-01-20 – $54.00 – Final Transcript of WGOV earnings conference call or presentation, 20-Jan-10 5:00pm ET

Woodward Q3 2009 Earnings Conference Call Transcript – 2009-07-23 – $54.00 – Final Transcript of WGOV earnings conference call or presentation, 23-Jul-09 5:00pm ET

Woodward Q2 2009 Earnings Conference Call Transcript – 2009-04-22 – $54.00 – Final Transcript of WGOV earnings conference call or presentation, 22-Apr-09 6:00pm ET

Woodward Merger & Acquisition Call to Discuss the Acquisition of HR Textron and the 2009 Earnings Outlook Transcript – 2009-03-03 – $54.00 – Final Transcript of WGOV M&A conference call or presentation, 3-Mar-09 4:30pm ET

Woodward Q1 2009 Earnings Conference Call Transcript – 2009-01-20 – $54.00 – Final Transcript of WGOV earnings conference call or presentation, 20-Jan-09 6:00pm ET

Woodward Q4 2008 Earnings Conference Call Transcript – 2008-11-19 – $54.00 – Final Transcript of WGOV earnings conference call or presentation, 19-Nov-08 6:00pm ET

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Thomson StreetEvents. "Woodward Q4 2009 Earnings Conference Call Transcript" Nov 18, 2009. Alacra Store. Oct 22, 2014. <http://www.alacrastore.com/thomson-streetevents-transcripts/Q4-2009-Woodward-Earnings-Conference-Call-T2537058>
  
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