The 10-second takeaway
For the quarter ended March 30 (Q2), TransDigm Group met expectations on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue grew. Non-GAAP earnings per share increased. GAAP earnings per share contracted significantly.
Margins contracted across the board.
TransDigm Group reported revenue of $465.6 million. The 13 analysts polled by S&P Capital IQ foresaw revenue of $468.8 million on the same basis. GAAP reported sales were 10.0% higher than the prior-year quarter's $423.5 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 $1.74. The 14 earnings estimates compiled by S&P Capital IQ anticipated $1.73 per share. Non-GAAP EPS of $1.74 for Q2 were 5.5% higher than the prior-year quarter's $1.65 per share. GAAP EPS of $1.25 for Q2 were 17% lower than the prior-year quarter's $1.51 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 55.7%, 150 basis points worse than the prior-year quarter. Operating margin was 41.7%, 220 basis points worse than the prior-year quarter. Net margin was 14.6%, 470 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $487.5 million. On the bottom line, the average EPS estimate is $1.85.
Next year's average estimate for revenue is $1.88 billion. The average EPS estimate is $6.92.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 364 members out of 381 rating the stock outperform, and 17 members rating it underperform. Among 140 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 135 give TransDigm Group a green thumbs-up, and five 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 $157.00.
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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. The Motley Fool recommends 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.