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Tale of the Tape

Zacks Equity Research

TransDigm's (TDG) Q4 Earnings Top Estimates, Revenues Miss
November 14, 2016

TDG

Trades from $3

TransDigm Group Incorporated (TDG - Free Report) is a leading global designer, producer and supplier of highly engineered aircraft components that are used in in-service commercial and military aircraft. The company has an extensive portfolio of proprietary products, which boosts its competitive position.

About 90% of TDG’s sales are generated by proprietary products, that is, products for which the company owns the intellectual property. This translates into consistent and sustained revenue generation capacity through all phases of the aerospace cycle. The company is also enjoying robust momentum in commercial aftermarket sales, thus supplementing its growth momentum.

Also, impressive performance of commercial transport industry is also adding to TDG’s bliss. This apart, the company has been consistently strengthening its highly-engineered proprietary aerospace business with strategic acquisitions. TDG’s acquired businesses will likely continue being strong growth drivers in the coming times. Further, the company’s efforts to streamline costs will likely translate into strong margin expansion in the quarters ahead.

The company has had a decent earnings history. It beat the Zacks Consensus Estimate thrice in the trailing four quarters, with an average positive surprise of 12.3%.

Currently, TDG has a Zacks Rank #2 (Buy) but that could definitely change following its fourth-quarter fiscal 2016 earnings report, which has just released. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

We have highlighted some of the key stats from this just-revealed announcement below:

Earnings: TDG’s fourth-quarter fiscal 2016 adjusted earnings came in at $3.10 per share, beating the Zacks Consensus Estimate of $3.07 comfortably.

Revenue: Revenues of the company came in at $875.2 million, missing the Zacks Consensus Estimate of $880 million.

TRANSDIGM GROUP Price and EPS Surprise

 

TRANSDIGM GROUP Price and EPS Surprise | TRANSDIGM GROUP Quote

Key Stats: During the quarter, the company completed the acquisition of Young & Franklin Inc. and its subsidiaries, including Tactair Fluid Controls Inc., for a total purchase price of $260 million in cash.  Also, the company completed an offering of $1,150 million of term loans that will be maturing in 2023. These proceeds were used to partially fund a special dividend of $24.00 per share paid in November 2016 and to repurchase $500 million of existing 7.50% Senior Subordinated Notes due in 2021.

Stock Price: TDG shares were up 0.26% following the release. It would be interesting to see how the market reacts to the results during the trading session today.

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