Yahoo Finance Why Is TransDigm (TDG) Up 3.6% Since Last Earnings Report?
A month has gone by since the last earnings report for TransDigm Group (TDG). Shares have added about 3.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is TransDigm due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
TransDigm Beats on Q2 Earnings, Ups '24 Sales View
TransDigm Group reported second-quarter fiscal 2024 adjusted earnings of $7.99 per share, which beat the Zacks Consensus Estimate of $7.37 by 8.4%. The bottom line also improved 33.6% from the prior-year quarter’s reported figure of $5.98.
Barring one-time items, the company recorded GAAP earnings of $6.97 per share compared with $5.32 in the year-ago quarter.
Sales
Net sales amounted to $1.92 billion, up 20.5% from $1.59 billion registered in the prior-year period. The reported figure also beat the Zacks Consensus Estimate of $1.89 billion by 1.8%.
Operating Results
The gross profit for the quarter came in at $1.15 billion, up 24% from the year-ago quarter’s level of $929 million.
Net income increased 32.9% year over year to $404 million. The growth was primarily driven by an increase in net sales and the application of the company’s value-driven operating strategy.
Financial Position
Cash and cash equivalents as of Mar 30, 2024, amounted to $4.29 billion, up from $3.47 billion as of Sep 30, 2023.
Long-term debt totaled $21.33 billion compared with $19.33 billion as of Sep 30, 2023.
Cash from operating activities amounted to $865 million compared with $507 million at the end of the second quarter of fiscal 2023.
Guidance
TransDigm raised its guidance for fiscal 2024. The company now expects sales in the range of $7.68-$7.80 billion, up from the earlier guidance of $7.48-$7.68 billion. The Zacks Consensus Estimate for the same is pegged at $7.70 billion, lower than the midpoint of the company’s guided range.
TDG currently expects fiscal 2024 adjusted earnings in the band of $31.75-$33.09 per share, up from the prior guidance of $31.00-$32.94. The Zacks Consensus Estimate for earnings is pegged at $31.45 per share, lower than the company’s guided range.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
Currently, TransDigm has a subpar Growth Score of D, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, TransDigm has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
TransDigm is part of the Zacks Aerospace - Defense Equipment industry. Over the past month, Curtiss-Wright (CW), a stock from the same industry, has gained 1.3%. The company reported its results for the quarter ended March 2024 more than a month ago.
Curtiss-Wright reported revenues of $713.17 million in the last reported quarter, representing a year-over-year change of +13.1%. EPS of $1.99 for the same period compares with $1.53 a year ago.
For the current quarter, Curtiss-Wright is expected to post earnings of $2.25 per share, indicating a change of +4.7% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.2% over the last 30 days.
Curtiss-Wright has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
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Transdigm Group Incorporated (TDG) : Free Stock Analysis Report
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