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Will Solid Segment Performance Aid TransDigm (TDG) Q1 Earnings?

·4 min read

TransDigm Group Incorporated TDG is slated to report first-quarter fiscal 2022 results on Feb 8 before market open.

TransDigm Group has a four-quarter earnings surprise of 5.57%, on average. Its first-quarter results might have been boosted by the improvement in commercial OEM (Original Equipment Manufacturer) and aftermarket revenues, thus adding impetus to the performance of the overall top line.

Power & Control Segment Poised to Boost Revenues

The gradual recovery in the commercial aerospace industry may have favorably contributed to TDG’s Power & Control segment revenues in the soon-to-be-reported quarter. The segment might have had recorded a surge in commercial OEM and aftermarket revenues, thus benefiting the unit’srevenues in the soon-to-be-reported quarter.

Also, an increase in defense market revenues, buoyed by strong order growth, is expected to have boosted TransDigm Group’s top line in the fiscal first quarter.

The Zacks Consensus Estimate for the Power & Control segment’s first-quarter revenues, pegged at $652 million, suggests an improvement of 8.5% from the year-ago quarter’s reported figure.

Airframe Segment – Another Revenue Contributor

The encouraging recovery trend in the commercial aerospace sector is expected to have had positively impacted the Airframe segment’s performance. A surge in commercial OEM and commercial aftermarket sales is anticipated to have been the primary driver for strong revenues in the soon-to-be-reported quarter.

The Zacks Consensus Estimate for the Airframe segment’s fiscal first-quarter revenues, pegged at $542 million, suggests an improvement of 16.8% from the year-ago quarter’s reported figure.

Transdigm Group Incorporated Price and EPS Surprise

Transdigm Group Incorporated Price and EPS Surprise
Transdigm Group Incorporated Price and EPS Surprise

Transdigm Group Incorporated price-eps-surprise | Transdigm Group Incorporated Quote

First-Quarter Estimates

With the majority of TransDigm Group’s segments anticipated to report an improvement in sales, it makes one optimistic about strong growth in the top line of the company in the soon-to-be-reported quarter. The Zacks Consensus Estimate for fiscal first-quarter sales is pegged at $1.22 billion, indicating an increase of 10.5% from the prior-year reported figure.

TransDigm Group might reflect a favorable impact from cost management and its continuous focus on the operating strategy, which might have added impetus to its bottom line in the soon-to-be-reported quarter. Also, the positive synergy from the Cobham Aero Connectivity business acquisition is expected to have added impetus to its bottom line in the first quarter.

The Zacks Consensus Estimate for first-quarter earningsis pegged at $3.10 per share, indicating an increase of 57.4% from the prior-year reported figure.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for TDG this time. The combination of a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that is not the case here.

TransDigm Group has an Earnings ESP of -3.18% and a Zacks Rank #2. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

Stocks to Consider

Here are three defense players you may want to consider as they have the right combination of elements to post an earnings beat this season:

Aerojet Rocketdyne Holdings AJRD has an Earnings ESP of +2.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Aerojet has a four-quarter average negative earnings surprise of 2.91%. The Zacks Consensus Estimate for AJRD’s fourth-quarter sales and earnings is pegged at $578.5 million and 50 cents per share, respectively.

HEICO Corporation HEI has an Earnings ESP of +1.17% and a Zacks Rank #3. HEICO has a four-quarter average earnings surprise of 6.86%.

The Zacks Consensus Estimate for HEI’s first-quarter earnings is pegged at 57 cents per share, indicating a surge of 11.8% from the prior-year quarter’s reported figure. Its first-quarter sales estimate is pegged at $485.5 million, suggesting an improvement of 16.2% million from the year-ago quarter.

Triumph Group TGI has an Earnings ESP of +1.01% and a Zacks Rank #3. Triumph Group delivered a four-quarter average earnings surprise of 101.89%.

The Zacks Consensus Estimate for TGI’s fourth-quarter sales and earnings is pegged at $368.8 million and 20 cents per share, respectively. Triumph Group boasts a long-term earnings growth rate of 2.6%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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Triumph Group, Inc. (TGI) : Free Stock Analysis Report

Transdigm Group Incorporated (TDG) : Free Stock Analysis Report

Heico Corporation (HEI) : Free Stock Analysis Report

Aerojet Rocketdyne Holdings, Inc. (AJRD) : Free Stock Analysis Report

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