(Reuters) - Aerospace and defense components supplier Woodward Inc (WWD.O) 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.
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.
Many of the newly awarded programs required increased investments as they expanded more than anticipated in content and complexity, it said.
Woodward, which supplies products like air valves, cockpit controls and fuel systems to aircraft makers, said it expects to earn between $1.90 and $2.00 per share for the full year, up from its prior view of $2.20 to $2.35 per share.
Analysts on average were expecting earnings of $2.25 per share, according to Thomson Reuters I/B/E/S. [ID:nASA04H2C]
For the third quarter, Woodward expects to report earnings of about 40 cents per share on revenue of about $460 million.
The company also said it signed a 10-year agreement with Caterpillar Inc (CAT.N) to supply diesel fuel injection systems and energy controls technologies. It did not disclose the value of the deal.
Woodward will report third-quarter results after market close on July 23.
Collins, Colorado-based Woodward’s shares were down 9 percent at $32.97 in late morning trade on the Nasdaq. They touched a low of $30.16 earlier in the day.
Reporting by Bijoy Koyitty in Bangalore; Editing by Saumyadeb Chakrabarty