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TransDigm (TDG) Q3 Earnings Beat Estimates, Sales Fall Y/Y
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TransDigm Group Incorporated (TDG - Free Report) reported third-quarter fiscal 2020 adjusted earnings of $1.54 per share, which surpassed the Zacks Consensus Estimate of 99 cents by 55.6%. However, the bottom line decreased 66.9% from $4.65 reported in the year-ago quarter.
Barring one-time items, the company reported GAAP loss of 9 cents per share against earnings of $2.27 in the year-ago quarter.
The year-over-year deterioration can be attributed to a decline in net sales, along with COVID-19 restructuring costs, higher interest expense and a higher tax rate due to discrete one-time tax charges being taken during the quarter.
Sales
Net sales amounted to $1,022 million, reflecting a decline of 32.8% from $1,521 million in the prior-year quarter. The reported figure however outpaced the Zacks Consensus Estimate of $1,007 million by 1.5%. Meanwhile, organic sales declined 9.6%.
Transdigm Group Incorporated Price, Consensus and EPS Surprise
The company incurred net loss of $5 million from continuing operations in the quarter against income of $128 million in the comparable quarter a year ago.
The effective tax rate was 113.5% compared with 30% in the comparable period in fiscal 2019. The deterioration was due to the unfavorable economic impact of the COVID-19 pandemic on the company's net interest deduction limitation and a discrete cumulative adjustment associated with excess tax benefits from share-based payments.
Financial Position
TransDigm ended the third quarter of fiscal 2020 with cash and cash equivalents of $4,549 million, up from $1,467 million as of Sep 30, 2019. At the end of the reported quarter, the company’s long-term debt was $19.41 billion, up from $16.47 billion as of Sep 30, 2019.
Cash from operating activities amounted to $991 million as of Jun 27, 2020 compared with $768 million as of Jun 29, 2019.
Fiscal 2020 Outlook
Given the considerable uncertainty around the extent and duration of business disruptions related to the COVID-19 pandemic and how it will impact operations, TransDigm kept its previously provided fiscal 2020 guidance suspended.
Zacks Rank
TransDigm Group currently carries a Zacks Rank #4 (Sell).
Teledyne Technologies (TDY - Free Report) reported second-quarter 2020 adjusted earnings of $2.43 per share, which surpassed the Zacks Consensus Estimate of $2.01 by 20.9%.
Lockheed Martin (LMT - Free Report) reported second-quarter 2020 adjusted earnings of $6.13 per share, which surpassed the Zacks Consensus Estimate of $5.71 by 7.4%.
Hexcel Corporation (HXL - Free Report) reported second-quarter 2020 adjusted earnings of 8 cents per share, which missed the Zacks Consensus Estimate of 20 cents by 60%.
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TransDigm (TDG) Q3 Earnings Beat Estimates, Sales Fall Y/Y
TransDigm Group Incorporated (TDG - Free Report) reported third-quarter fiscal 2020 adjusted earnings of $1.54 per share, which surpassed the Zacks Consensus Estimate of 99 cents by 55.6%. However, the bottom line decreased 66.9% from $4.65 reported in the year-ago quarter.
Barring one-time items, the company reported GAAP loss of 9 cents per share against earnings of $2.27 in the year-ago quarter.
The year-over-year deterioration can be attributed to a decline in net sales, along with COVID-19 restructuring costs, higher interest expense and a higher tax rate due to discrete one-time tax charges being taken during the quarter.
Sales
Net sales amounted to $1,022 million, reflecting a decline of 32.8% from $1,521 million in the prior-year quarter. The reported figure however outpaced the Zacks Consensus Estimate of $1,007 million by 1.5%. Meanwhile, organic sales declined 9.6%.
Transdigm Group Incorporated Price, Consensus and EPS Surprise
Transdigm Group Incorporated price-consensus-eps-surprise-chart | Transdigm Group Incorporated Quote
Operating Results
The company incurred net loss of $5 million from continuing operations in the quarter against income of $128 million in the comparable quarter a year ago.
The effective tax rate was 113.5% compared with 30% in the comparable period in fiscal 2019. The deterioration was due to the unfavorable economic impact of the COVID-19 pandemic on the company's net interest deduction limitation and a discrete cumulative adjustment associated with excess tax benefits from share-based payments.
Financial Position
TransDigm ended the third quarter of fiscal 2020 with cash and cash equivalents of $4,549 million, up from $1,467 million as of Sep 30, 2019. At the end of the reported quarter, the company’s long-term debt was $19.41 billion, up from $16.47 billion as of Sep 30, 2019.
Cash from operating activities amounted to $991 million as of Jun 27, 2020 compared with $768 million as of Jun 29, 2019.
Fiscal 2020 Outlook
Given the considerable uncertainty around the extent and duration of business disruptions related to the COVID-19 pandemic and how it will impact operations, TransDigm kept its previously provided fiscal 2020 guidance suspended.
Zacks Rank
TransDigm Group currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
Teledyne Technologies (TDY - Free Report) reported second-quarter 2020 adjusted earnings of $2.43 per share, which surpassed the Zacks Consensus Estimate of $2.01 by 20.9%.
Lockheed Martin (LMT - Free Report) reported second-quarter 2020 adjusted earnings of $6.13 per share, which surpassed the Zacks Consensus Estimate of $5.71 by 7.4%.
Hexcel Corporation (HXL - Free Report) reported second-quarter 2020 adjusted earnings of 8 cents per share, which missed the Zacks Consensus Estimate of 20 cents by 60%.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>