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TransDigm's (TDG) Q1 Earnings Miss Estimates, Sales Down Y/Y

Zacks Equity Research
·3-min read

TransDigm Group Incorporated TDG reported first-quarter fiscal 2021 adjusted earnings of $1.97 per share, which missed the Zacks Consensus Estimate of $2.09 by 5.7%. Moreover, the bottom line plunged 59.4% from the prior-year quarter’s $4.93. The decline primarily reflects a decrease in net sales and higher interest expenses during the quarter.

Barring one-time items, the company reported GAAP losses of 42 cents per share against GAAP earnings of 83 cents in the prior-year quarter. The year-over-year bottom-line decline can be attributed to dividend equivalent payments made during the quarter, pursuant to the company's employee stock option program.

Sales

Net sales amounted to $1,108 million, reflecting a year-over-year decline of 24.4% from the prior-year quarter’s sales of $1,465 million. The top line also missed the Zacks Consensus Estimate of $1,117 million by 0.8%. In the current quarter, all sales represent organic sales.

Operating Results

The company reported a net income of $50 million from continuing operations in the quarter compared with a net income of $305 million in the comparable quarter a year ago.

Selling and administrative expenses in the quarter amounted to $197 million compared with $201 million in the prior-year quarter.

Transdigm Group Incorporated Price, Consensus and EPS Surprise

Transdigm Group Incorporated Price, Consensus and EPS Surprise
Transdigm Group Incorporated Price, Consensus and EPS Surprise

Transdigm Group Incorporated price-consensus-eps-surprise-chart | Transdigm Group Incorporated Quote

Financial Position

TransDigm ended first-quarter fiscal 2021 with cash and cash equivalents of $4,907 million, up from $4,717 million as of Sep 30, 2020.

At the end of the reported quarter, the company’s long-term debt summed $19.39 billion, up slightly from $19.38 billion as of Sep 30, 2020.

Cash from operating activities amounted to $274 million as of Jan 2, 2021, compared with $433 million as of Dec 28, 2019.

Fiscal 2021 Outlook

Given the considerable uncertainty concerning the extent and duration of business disruptions stemming from the COVID-19 pandemic and how it will impact operations further, TransDigm kept its previously provided fiscal 2021 guidance suspended.

Zacks Rank

Transdigm currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Defense Releases

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General Dynamics Corporation GD reported fourth-quarter 2020 earnings from continuing operations of $3.49 per share, which missed the Zacks Consensus Estimate of $3.55 by 1.7%.

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