TDG Beats 4Q, Lags Full Year Est. - Analyst Blog


TransDigm Group Incorporated ( TDG ) reported fourth-quarter fiscal 2011 earnings per share from continuing operations of $1.20, outpacing the Zacks Consensus Estimate by 4 cent and prior-year earnings of 96 cents.

TransDigm's income in the quarter was negatively affected by acquisition-related expenses of $8.6 million and higher interest expense related to the refinancing of the company's debt structure in the first quarter of fiscal 2011.

For fiscal 2011, earnings per share from continuing operations were $2.80, below the Zacks Consensus Estimate of $3.02, above prior-year earnings of 2.52 cents.


Net sales were $343.0 million, a rise of 53.7% year over year. Organically, sales during the quarter increased by approximately 13.7%, driven by improved commercial aftermarket and OEM markets and increase in defense sales. Sales during the quarter were also aided by acquisitions of Semco Instruments, McKechnie Aerospace and Talley Actuation.

For fiscal 2011, net sales were $1.21 billion, up 45.7% year over year. Besides, about 50% of sales growth was derived from recent acquisitions and strong organic revenue growth in both the commercial OEM and aftermarket aerospace markets.

During the year, TransDigm completed the acquisition of three proprietary aerospace component businesses for approximately $1.6 billion.

Income & Expenses

Income from operations for the quarter was $142.4 million compared with $103.3 million in the prior-year period. Selling and administrative expenses were $38.5 million compared with $25.5 million in the comparable quarter last year. EBITDA for the quarter jumped 44.2% to $160.0 million.

Balance Sheet & Cash Flow

Cash and cash equivalents were $376.2 million at the end of the year compared with $234.1 million at the end of fiscal 2010. Long-term debt was $3.1 billion and shareholders equity was $810.9 million at the end of fiscal 2011.

Net cash from operating activities was $260.6 million in fiscal 2011 compared with $197.3 million in the prior year.


TransDigm expects total revenue for fiscal 2012 to be in the range of $1,430 million to $1,470 million and earnings per share to be in the range of $4.95 to $5.27. Adjusted earnings per share are expected to be in the range of $5.35 to $5.67.

The company expects to achieve revenue growth in Commercial OEM market in the mid-teen percentage range, about 10% in commercial after market and decline slightly in the Defense market. Fiscal 2012 will witness considerable uncertainty considering the overall economy related to the United States Defense Budget.

Based in Cleveland, Ohio, TransDigm Group Inc.designs, produces, and supplies engineered aircraft components for use on commercial and military aircraft. The company operates principally in the US. Major competitors of the company are Goodrich Corp. ( GR ), Honeywell International Inc. ( HON ) and United Technologies Corp. ( UTX ).

We maintain a Zacks #2 Rank (short-term Buy recommendation) on TransDigm.

GOODRICH CORP ( GR ): Free Stock Analysis Report
HONEYWELL INTL ( HON ): Free Stock Analysis Report
TRANSDIGM GROUP ( TDG ): Free Stock Analysis Report
UTD TECHS CORP ( UTX ): Free Stock Analysis Report
Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: GR , HON , TDG , UTX

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