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What's in the Cards for TransDigm Group's (TDG) Q4 Earnings?

Zacks Equity Research

Transdigm Group Incorporated TDG is set to report fourth-quarter fiscal 2019 results on Nov 19, before market open.

In the last reported quarter, the company delivered a positive earnings surprise of 14.85%. Moreover, it surpassed the Zacks Consensus Estimate in the trailing four quarters, with average positive earnings surprise of 10.71%.

Let’s see how things are shaping up prior to this announcement.

Factors at Play

Commercial aftermarket sales have been consistently boosting Transdigm Group’s top-line performance over the last few quarters. Considering the OEM and defense aftermarket sales, Transdigm Group has been witnessing solid revenue growth alongside continued booking strength in defense products for the first three quarters of fiscal 2019. In sync with this, the company, in the third-quarter earnings call, announced its anticipation to generate moderate defense sales growth for the fourth quarter.

Considering the aforementioned developments, we anticipate such trends to have boosted the company’s top line in the fourth quarter. The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $1,663 million, indicating an improvement of 58.5% from fourth-quarter fiscal 2018.

Apart from these organic sales contribution, Transdigm Group closed the Esterline Technologies acquisition in March for $4 billion. Positive synergies from this buyout are expected to have contributed to Transdigm Group’s bottom line in the to-be-reported quarter.

In line with this, for fourth-quarter earnings, the Zacks Consensus Estimate stands at $5.08 per share, implying 14.4% growth from the year-ago quarter’s reported figure.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Transdigm Group in the fiscal fourth quarter. 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Transdigm Group has an Earnings ESP of 0.00% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Transdigm Group Incorporated Price and EPS Surprise

Transdigm Group Incorporated Price and EPS Surprise

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

Recent Defense Releases

Northrop Grumman Corporation NOC reported third-quarter 2019 earnings of $5.49 per share, which surpassed the Zacks Consensus Estimate of $4.74 by 15.8%. However, the bottom line declined 22.8% from $7.11 per share reported in the year-ago quarter.

Lockheed Martin Corp LMT reported third-quarter 2019 earnings of $5.66 per share, which surpassed the Zacks Consensus Estimate of $5.03 by 12.5%. The bottom line also improved 10.1% from $5.14 in the year-ago quarter.

General Dynamics Corporation GD reported third-quarter 2019 earnings from continuing operations of $3.14 per share, which beat the Zacks Consensus Estimate of $3.06 by 2.6%. The bottom line also improved 10.2% from the prior-year quarter’s $2.85 per share.

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