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Woodward rebuffs rumours regarding talks with Boeing
Posted on Friday, 09 February 2018 13:09
Woodward, a US-based aerospace and industrial markets firm, has denied discussions with Boeing after reports from the Wall Street Journal (WSJ), among other sources, suggested the possibility of a deal.
The group issued a statement to make clear the “rumour is incorrect” after the bell rang yesterday and sent shares up more than 7.0 per cent to USD 82.93.
Sources close to the matter told the WSJ earlier in the day that Boeing is in talks to buy the aerospace parts manufacturer and the two have been for a number of months.
An acquisition of Woodward, which has a market capitalisation of roughly USD 4.80 billion, would highlight the potential suitor’s appetite as it is also trying to buy some or all of Brazilian jetliner Embraer as part of its efforts to ramp up competition with industry rival Airbus.
Bloomberg also picked up on the WSJ article and cited its own sources as saying a tie up is not imminent and there can be no guarantee discussions will reach a final agreement.
However, an analyst at C L King & Associates told the news provider a joint venture would be more likely than an acquisition as a large portion of Woodward’s sales are to energy companies and its aerospace business also has a jet-engine partnership with General Electric which may cause problems in a full takeover.
While shares were up almost 8.0 per cent at the time of closing yesterday, stock price declined 11.3 per cent to USD 73.50 in after-market trading following the announcement that talks are not taking place.
Woodward’s aerospace components and systems optimise the performance of fixed wing and rotorcraft platforms in commercial, business and military aircrafts, as well as ground vehicles and other equipment.
In the first quarter of fiscal 2018 ended 31st December 2017, the group posted net sales of USD 470.15 million, up 6.2 per cent from USD 442.89 million in the corresponding period of 2016.
Woodward reported earnings before income taxes of USD 37.49 million for the three month timeframe, down 20.3 per cent from USD 47.06 million in Q1 2017.
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