TDG Beats Estimate - Analyst Blog


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TransDigm Group Incorporated ( TDG ) reported first-quarter fiscal 2012 earnings per share from continuing operations of $1.15, outpacing the Zacks Consensus Estimate of $1.11 and prior-year loss per share of $1.19. Loss per share in first-quarter fiscal 2011 was a result of 87 cents per share of one-time cost related to the refinancing of the company's capital structure to fund the acquisition of McKechnie.

Earnings in the reported quarter was aided by increased sales, solid proprietary products of the company, good productivity and favorable tax adjustments, partially offset by increased interest expense.


Net sales were $352.5 million, up 50.9% year over year. Organically, sales during the quarter increased by approximately 18.4%, driven by increased sales in commercial aftermarket and OEM markets and a slight improvement in defense sales. Sales during the quarter were also aided by acquisitions of McKechnie Aerospace, Schneller, Harco and Talley Actuation.

Income & Expenses

Income from operations for the quarter was $145.3 million compared with $92.3 million in the prior-year period. Selling and administrative expenses were $41.9 million compared with $30.5 million in the comparable quarter last year. EBITDA for the quarter jumped to $163.0 million from $30.2 million.

Balance Sheet & Cash Flow

Cash and cash equivalents were $359.9 million at the end of the quarter compared with $376.3 million at the end of fiscal 2011. Long-term debt was $3.1 billion while shareholders equity was $887.1 million at the end of the quarter.

Net cash from operating activities was $67.7 million in the first quarter compared with $62.1 million in the prior-year period.


TransDigm expects total revenue for fiscal 2012 to be in the range of $1,470 million to $1,510 million, up from its prior guidance range of $1,430 million to $1,470 million and earnings per share is expected to be in the range of $5.15 to $5.49, up from its prior guidance of $4.95 to $5.27. Adjusted earnings per share are expected to be in the range of $5.66 to $6.00, up from its prior guidance of $5.35 to $5.67.

The company revised its guidance to account for recent acquisition of Harco. However, uncertain aerospace market and worldwide economic environment remain a matter of concern.

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 ).

Currently, we maintain a Zacks #3 Rank (short-term Hold 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
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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