TransDigm Group Outruns Estimates Again

Seth Jayson, The Motley Fool
Updated

TransDigm Group (NYS: TDG) reported earnings today. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q1), TransDigm Group beat expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share improved.

Gross margins improved, operating margins dropped, net margins increased.

Revenue details
TransDigm Group logged revenue of $352.5 million. The 13 analysts polled by S&P Capital IQ hoped for net sales of $340.6 million. Sales were 49% higher than the prior-year quarter's $240.0 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $1.42. The 14 earnings estimates compiled by S&P Capital IQ predicted $1.26 per share on the same basis. GAAP EPS were $1.15 for Q1 compared to -$0.19 per share for the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 56.6%, 20 basis points better than the prior-year quarter. Operating margin was 41.2%, 50 basis points worse than the prior-year quarter. Net margin was 18.5%, 2,160 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $361.2 million. On the bottom line, the average EPS estimate is $1.37.

Next year's average estimate for revenue is $1.47 billion. The average EPS estimate is $5.65.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 260 members out of 271 rating the stock outperform, and 11 members rating it underperform. Among 104 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 102 give TransDigm Group a green thumbs-up, and two give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on TransDigm Group is outperform, with an average price target of $107.47.

At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of TransDigm Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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