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TransDigm (TDG) Q4 Earnings Beat Estimates, Sales Fall Y/Y

TransDigm Group Incorporated TDG reported fourth-quarter fiscal 2020 adjusted earnings of $2.89 per share, which surpassed the Zacks Consensus Estimate of $1.90 by 52.1%. However, the bottom line plunged 48.6% from $5.62 reported in the year-ago quarter.

Barring one-time items, the company reported GAAP earnings of $1.76 per share compared with $4.08 in the year-ago quarter.

Sales

Net sales amounted to $1,173 million, reflecting a decline of 23.9% from $1,541 million in the prior-year quarter. The reported figure, however, outpaced the Zacks Consensus Estimate of $1,096 million by 7%. Meanwhile, organic sales dropped 13.8%.

Operating Results

The company reported a net income of $101 million from continuing operations in the quarter compared with the net income of $317 million in the comparable quarter a year ago.

The effective tax rate for fiscal 2020 was 11.7% compared to 20.9% for fiscal 2019.

Transdigm Group Incorporated Price, Consensus and EPS Surprise

Financial Position

TransDigm ended the fourth quarter of fiscal 2020 with cash and cash equivalents of $4,717 million, up from $1,467 million as of Sep 30, 2019.

At the end of the reported quarter, the company’s long-term debt was $19.38 billion, up from $16.47 billion as of Sep 30, 2019.

Cash from operating activities amounted to $1,213 million as of Sep 30, 2020, compared with $1,015 million as of Sep 30, 2019.

Fiscal 2020 Outlook

Given the considerable uncertainty concerning the extent and duration of business disruptions related to the COVID-19 pandemic and how it will impact operations, TransDigm kept its previously provided fiscal 2020 guidance suspended.

Zacks Rank

TransDigm currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Defense Releases

Lockheed Martin LMT reported third-quarter 2020 earnings from continuing operations of $6.25 per share, which surpassed the Zacks Consensus Estimate of $6.07 by 3%.

The Boeing Company BA incurred an adjusted loss of $1.39 per share for third-quarter 2020, narrower than the Zacks Consensus Estimate of a loss of $2.33.

General Dynamics GD reported third-quarter 2020 earnings from continuing operations of $2.90 per share, which beat the Zacks Consensus Estimate of $2.85 by 1.8%.

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