Will Growing Air Travel Boost TransDigm's (TDG) Q1 Results?
TransDigm Group Incorporated TDG is slated to report first-quarter fiscal 2024 results on Feb 8, before market open.
TransDigm delivered a four-quarter average earnings surprise of 9.20%. The recovery in the commercial aerospace market and strong defense sales are likely to have bolstered TDG’s fiscal first-quarter results.
Power & Control Segment to Remain Robust
Strong sales from the commercial aftermarket as well as commercial original equipment manufacturer (OEM) businesses, backed by continued recovery in commercial air travel demand and the resulting higher flight hours and utilization of aircraft, must have bolstered revenues for the Power & Control segment.
Transdigm Group Incorporated Price and EPS Surprise
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Also, robust defense spending from the U.S. government has been bolstering TDG’s defense business’ sales, which, in turn, is also likely to have aided this segment’s revenue performance in the fiscal first quarter.
The Zacks Consensus Estimate for the Power & Control segment’s fiscal first-quarter revenues is pegged at $813.6 million, indicating a 12.2% improvement from the year-ago quarter’s reported figure.
Airframe Segment to Boost Revenues
Sales from the Airframe segment are likely to have been boosted by the strong air travel growth that is driving the demand for narrow-body and wide-body aircraft. Positive synergies from the Calspan and Dart acquisitions might have also benefited this segment’s top-line performance.
The Zacks Consensus Estimate for the segment’s fiscal first-quarter revenues is pegged at $824.9 million, indicating 29.5% growth from the prior-year quarter’s reported actuals.
Q4 Estimates
Strong sales expectations from both of its primary segments, which constitute approximately 97% of TDG’s total revenues, must have bolstered its overall revenue performance in the fiscal first quarter. The Zacks Consensus Estimate for sales is pegged at $1.67 billion, indicating an improvement of 19.6% from the prior-year recorded number.
A strong top line is likely to have boosted TDG’s overall margin performance, thus contributing to its quarterly bottom line. The Zacks Consensus Estimate for fiscal first-quarter earnings is pegged at $6.37 per share, indicating an increase of 39.1% from the year-ago reported figure.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for TransDigm this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is not the case here.
Earnings ESP: The company’s Earnings ESP is -3.44%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: TransDigm carries a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks to Consider
Below are three defense stocks that have the right combination of elements to post an earnings beat this reporting cycle.
CAE Inc. CAE is slated to release third-quarter fiscal 2024 results on Feb 14. CAE has an Earnings ESP of +6.32% and a Zacks Rank #3 at present.
CAE delivered a four-quarter average earnings surprise of 15.97%. The consensus estimate for fiscal third-quarter earnings is pegged at 18 cents per share, while that for sales is pinned at $806 million.
Leidos LDOS is scheduled to release fourth-quarter results on Feb 13. LDOS has an Earnings ESP of +1.88% and a Zacks Rank #2 at present.
Leidos delivered a four-quarter average earnings surprise of 11.51%. The Zacks Consensus Estimate for LDOS’ fourth-quarter earnings is pegged at $1.73 per share, while that for sales is pinned at $3.79 billion.
Triumph Group TGI is slated to release third-quarter fiscal 2024 results on Feb 7. TGI has an Earnings ESP of +13.64% and a Zacks Rank #2 at present.
Triumph Group boasts a long-term earnings growth rate of 2.6%. The Zacks Consensus Estimate for TGI’s fourth-quarter earnings is pegged at 13 cents per share, while that for sales is pinned at $366.3 million.
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Triumph Group, Inc. (TGI) : Free Stock Analysis Report
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Leidos Holdings, Inc. (LDOS) : Free Stock Analysis Report
