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Will Solid Segmental Sales Boost TransDigm's (TDG) Q2 Results?
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TransDigm Group Incorporated (TDG - Free Report) is slated to report second-quarter fiscal 2024 results on May 7, before market open.
TransDigm delivered a four-quarter average earnings surprise of 10.74%. The improving growth trends in the commercial aerospace market and strong defense sales are likely to have bolstered TDG’s fiscal second-quarter results, amid the adverse impacts of higher interest expenses.
Power & Control Segment to Remain Robust
Strong sales from the commercial aftermarket, backed by steadily improving commercial air travel demand and the resulting higher flight hours and utilization of aircraft, must have bolstered revenues for the Power & Control segment. Improved sales from the commercial original equipment manufacturer (OEM) businesses, driven by continued recovery in both narrow-body and wide-body aircraft production and deliveries, can be expected to have favorably contributed to this segment’s top line.
Transdigm Group Incorporated Price and EPS Surprise
Also, favorable defense spending from the U.S. government has been bolstering TDG’s defense business sales, which, in turn, is also likely to have aided this segment’s revenue performance.
The Zacks Consensus Estimate for the Power & Control segment’s fiscal second-quarter revenues is pegged at $933.3 million, indicating a 14.4% improvement from the year-ago quarter’s reported figure.
Airframe Segment to Boost Revenues
Sales from the Airframe segment are likely to have been boosted by the strong air travel growth that is driving the demand for narrow-body and wide-body aircraft. Positive synergies from the Calspan acquisition might have also benefited this segment’s top-line performance.
The Zacks Consensus Estimate for the segment’s fiscal second-quarter revenues is pegged at $908.9 million, indicating 24% growth from the prior-year quarter’s reported actuals.
Q2 Estimates
Strong sales expectations from both of its primary segments, which constitute approximately 97% of TDG’s total revenues, must have bolstered its overall revenue performance in the fiscal second quarter. The Zacks Consensus Estimate for sales is pegged at $1.89 billion, indicating an improvement of 18.4% from the prior-year recorded number.
A strong top line is likely to have boosted TDG’s overall margin performance, thereby contributing favorably to its quarterly bottom line. However, higher interest expense associated with the incremental debt that the company incurred to fund the acquisition of CPI's Electron Device business might have hurt TDG’s overall earnings performance in the quarter.
The Zacks Consensus Estimate for fiscal second-quarter earnings is pegged at $7.37 per share, indicating an increase of 23.2% from the year-ago reported figure.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for TransDigm this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is not the case here.
Earnings ESP: The company’s Earnings ESP is -0.80%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Below are three defense stocks that have the right combination of elements to post an earnings beat this reporting cycle.
Embraer S.A. (ERJ - Free Report) is slated to release first-quarter results on May 7. ERJ has an Earnings ESP of +29.17% and a Zacks Rank #3 at present.
Embraer delivered an earnings surprise of 55.56% in the last reported quarter. The consensus estimate for first-quarter earnings is pegged at a loss of 12 cents per share, while that for sales is pinned at $833.9 million.
CAE Inc. (CAE - Free Report) is scheduled to release fourth-quarter fiscal 2024 results soon. CAE has an Earnings ESP of +1.07% and a Zacks Rank #3 at present.
CAE delivered a four-quarter average earnings surprise of 13.33%. The Zacks Consensus Estimate for CAE’s fiscal fourth-quarter earnings is pegged at 31 cents per share, while that for sales is pinned at $957.3 million.
Heico (HEI - Free Report) is scheduled to release second-quarter fiscal 2024 results soon. HEI has an Earnings ESP of +0.95% and a Zacks Rank #2 at present.
HEI delivered a four-quarter average earnings surprise of 10.49%. The Zacks Consensus Estimate for HEI’s fiscal second-quarter earnings is pegged at 79 cents per share, while that for sales is pinned at $941.2 million.
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Will Solid Segmental Sales Boost TransDigm's (TDG) Q2 Results?
TransDigm Group Incorporated (TDG - Free Report) is slated to report second-quarter fiscal 2024 results on May 7, before market open.
TransDigm delivered a four-quarter average earnings surprise of 10.74%. The improving growth trends in the commercial aerospace market and strong defense sales are likely to have bolstered TDG’s fiscal second-quarter results, amid the adverse impacts of higher interest expenses.
Power & Control Segment to Remain Robust
Strong sales from the commercial aftermarket, backed by steadily improving commercial air travel demand and the resulting higher flight hours and utilization of aircraft, must have bolstered revenues for the Power & Control segment. Improved sales from the commercial original equipment manufacturer (OEM) businesses, driven by continued recovery in both narrow-body and wide-body aircraft production and deliveries, can be expected to have favorably contributed to this segment’s top line.
Transdigm Group Incorporated Price and EPS Surprise
Transdigm Group Incorporated price-eps-surprise | Transdigm Group Incorporated Quote
Also, favorable defense spending from the U.S. government has been bolstering TDG’s defense business sales, which, in turn, is also likely to have aided this segment’s revenue performance.
The Zacks Consensus Estimate for the Power & Control segment’s fiscal second-quarter revenues is pegged at $933.3 million, indicating a 14.4% improvement from the year-ago quarter’s reported figure.
Airframe Segment to Boost Revenues
Sales from the Airframe segment are likely to have been boosted by the strong air travel growth that is driving the demand for narrow-body and wide-body aircraft. Positive synergies from the Calspan acquisition might have also benefited this segment’s top-line performance.
The Zacks Consensus Estimate for the segment’s fiscal second-quarter revenues is pegged at $908.9 million, indicating 24% growth from the prior-year quarter’s reported actuals.
Q2 Estimates
Strong sales expectations from both of its primary segments, which constitute approximately 97% of TDG’s total revenues, must have bolstered its overall revenue performance in the fiscal second quarter. The Zacks Consensus Estimate for sales is pegged at $1.89 billion, indicating an improvement of 18.4% from the prior-year recorded number.
A strong top line is likely to have boosted TDG’s overall margin performance, thereby contributing favorably to its quarterly bottom line. However, higher interest expense associated with the incremental debt that the company incurred to fund the acquisition of CPI's Electron Device business might have hurt TDG’s overall earnings performance in the quarter.
The Zacks Consensus Estimate for fiscal second-quarter earnings is pegged at $7.37 per share, indicating an increase of 23.2% from the year-ago reported figure.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for TransDigm this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is not the case here.
Earnings ESP: The company’s Earnings ESP is -0.80%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: TransDigm carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks to Consider
Below are three defense stocks that have the right combination of elements to post an earnings beat this reporting cycle.
Embraer S.A. (ERJ - Free Report) is slated to release first-quarter results on May 7. ERJ has an Earnings ESP of +29.17% and a Zacks Rank #3 at present.
Embraer delivered an earnings surprise of 55.56% in the last reported quarter. The consensus estimate for first-quarter earnings is pegged at a loss of 12 cents per share, while that for sales is pinned at $833.9 million.
CAE Inc. (CAE - Free Report) is scheduled to release fourth-quarter fiscal 2024 results soon. CAE has an Earnings ESP of +1.07% and a Zacks Rank #3 at present.
CAE delivered a four-quarter average earnings surprise of 13.33%. The Zacks Consensus Estimate for CAE’s fiscal fourth-quarter earnings is pegged at 31 cents per share, while that for sales is pinned at $957.3 million.
Heico (HEI - Free Report) is scheduled to release second-quarter fiscal 2024 results soon. HEI has an Earnings ESP of +0.95% and a Zacks Rank #2 at present.
HEI delivered a four-quarter average earnings surprise of 10.49%. The Zacks Consensus Estimate for HEI’s fiscal second-quarter earnings is pegged at 79 cents per share, while that for sales is pinned at $941.2 million.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.