The 10-second takeaway
For the quarter ended March 31 (Q2), TransDigm Group beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded significantly and GAAP earnings per share increased significantly.
Margins grew across the board.
TransDigm Group tallied revenue of $423.5 million. The 17 analysts polled by S&P Capital IQ predicted revenue of $389.1 million on the same basis. GAAP reported sales were 39% higher than the prior-year quarter's $304.3 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $1.65. The 17 earnings estimates compiled by S&P Capital IQ predicted $1.46 per share. GAAP EPS of $1.51 for Q2 were 44% higher than the prior-year quarter's $1.05 per share. (The prior-year quarter included $0.36 per share in earnings from discontinued operations.)
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 57.2%, 80 basis points better than the prior-year quarter. Operating margin was 43.9%, 210 basis points better than the prior-year quarter. Net margin was 19.3%, 100 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $450.0 million. On the bottom line, the average EPS estimate is $1.70.
Next year's average estimate for revenue is $1.68 billion. The average EPS estimate is $6.48.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 267 members out of 280 rating the stock outperform, and 13 members rating it underperform. Among 96 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 95 give TransDigm Group a green thumbs-up, and one 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 $127.87.
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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 of Motley 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.