TransDigm Outperforms Again

Zacks

TransDigm Group Incorporated (TDG) reported first-quarter 2013 earnings per share from continuing operations of $1.48, above the Zacks Consensus Estimate of 91 cents and prior-year earnings of $1.42.

GAAP earnings came in at 66 cents a share compared to $1.15 in the prior year quarter.

Revenue

Net sales in the quarter amounted to $430.4 billion, representing a year-over-year increase of 22.1%. The Harco, AmSafe and Aero-Instruments acquisitions were major contributors to growth. Organically the sales increased only modestly.

Income & Expenses

Operating income for the quarter was $172.8 million compared with $145.3 million in the prior-year period. SG&A expense was $55.2 million compared with $41.9 million in the prior-year period.

Balance Sheet and Cash Flow

Cash and cash equivalents were $554.4 million with long-term debt of $4.3 billion and shareowners’ equity of $598.8 million at the end of first quarter of fiscal 2013 compared with $440.5 million, $3.6 billion and $1.2 billion, respectively.

Cash from operating activities in the quarter was $98.1 million compared to $68.1 million in the first quarter of fiscal 2012.

Outlook

The company expects earnings from continuing operations to be in the range of $6.74 to $6.98 per share, up from prior guidance of $6.54 to $6.98 per share. Net sales are expected to be in the range of $1,820 million to $1,880 million, up from prior range of $1,800 million to $1,900 million. Mid point of sales guidance is unchanged at $1,850 million.

TransDigm Group Incorporated designs, produces and supplies highly engineered proprietary aerospace components (and certain systems/subsystems) with significant aftermarket content. Transdigm develops highly customized products to solve specific needs of aircraft operators and manufacturers. It attempts to differentiate itself on the basis of engineering, service and manufacturing capabilities.

TransDigm currently has a Zacks #3 Rank (Neutral). Its close rivals such as Rolls Royce (RYCEY), Alliant Techsystems (ATK) and BAE Systems-ADR (BAESY) all have a Zacks Rank #1 (Strong Buy).

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