TransDigm Group Earnings: Here’s Why the Stock is Down Now

TransDigm Group Incorporated (NYSE:TDG) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 1%.

TransDigm Group Incorporated Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 0.53% to $1.89 in the quarter versus EPS of $1.88 in the year-earlier quarter.

Revenue: Rose 5.84% to $488.6 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: TransDigm Group Incorporated reported adjusted EPS income of $1.89 per share. By that measure, the company beat the mean analyst estimate of $1.84. It missed the average revenue estimate of $488.67 million.

Quoting Management: “Overall we see positive signs in our third quarter results,” stated W. Nicholas Howley, TransDigm Group’s Chairman and Chief Executive Officer. “Our sales and bookings results in the quarter may have begun to indicate an inflection point for recovery in the commercial aftermarket. Though too soon to tell with certainty, we are hopeful this trend will continue. In addition, our organic commercial OEM and defense revenues continued to perform better than originally anticipated. Our third quarter EBITDA As Defined margin remained strong at 47.5%, in spite of both acquisition and ongoing unfavorable sales mix dilution.”

Key Stats (on next page)…

Revenue increased 4.94% from $465.61 million in the previous quarter. EPS increased 8.62% from $1.74 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $1.91 to a profit $1.87. For the current year, the average estimate has moved down from a profit of $7.01 to a profit of $6.97 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)