Will Airlift Increase Help TransDigm’s ( TDG ) Q2 Earnings? – May 8, 2023

TransDigm Group Incorporated (TDG extension Free report) is scheduled to report results for the fiscal second quarter of 2023 on May 9, before the market opens.

TransDigm delivered a four-quarter average earnings surprise of 7.60%. Rising demand for air travel and efforts to manage costs are likely to improve the company’s future results.

Power and control segment to increase revenue

Recent rapid growth in domestic air travel, along with the steady recovery seen in international air traffic with China reopening its air travel in January, is expected to boost organic sales of TDG’s commercial original equipment manufacturer (OEM) and commercial businesses for after sales services.

This, in turn, is likely to have contributed to the Power & Control segment’s earnings in the upcoming quarter.

Also, solid bookings in previous quarters may have benefited this segment’s defense revenue in the upcoming quarter.

The Zacks Consensus Estimate for the Power & Control segment’s revenue for the fiscal second quarter was pegged at $773.6 million, indicating a 9.3% improvement over the prior-quarter level.

Airframe segment – ​​another revenue contributor

Thanks to the solid air travel demand of late, the continued recovery in production and deliveries of both narrow-body and wide-body aircraft should have supported the highest growth in the Aiframe segment in the quarter to be reported.

The Zacks Consensus Estimate for the segment’s revenue in the fiscal second quarter was pegged at $680.9 million, representing an increase of 17.6% over the reported figure for the prior quarter.

Q2 forecasts

With most of TransDigm’s segments expected to report improvement in sales, this makes one bullish on the company’s top-line growth in the upcoming quarter. The Zacks Consensus Estimate for sales was pegged at $1.50 billion, indicating a 13.3% improvement over the number recorded in the prior year.

The company’s operational excellence and cost minimization efforts are expected to boost the bottom line. Also, the continued recovery in aftermarket revenue is likely to have benefited TDG’s quarterly margin, thereby boosting earnings.

The Zacks Consensus Estimate for fiscal second-quarter earnings was pegged at $5.42 per share, marking a 40.4% increase from the figure reported a year ago.

What the Zacks Model Reveals

Our proven model does not predict a decidedly higher profit for TransDigm this time. The combination of a positive earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of winning earnings. However, that is not the case here.

Earnings ESP: The company’s profit is -1.23%. You can discover the best stocks to buy or sell before they are reported with our ESP Earnings Filter.

Zacks Rank: TransDigm currently carries a Zacks Rank #3. You can see the full list of today’s Zacks #1 Rank stocks here.

Recent versions of protection

The Boeing Company (B.A Free Report ) posted a 2023 first-quarter adjusted loss of $1.27 per share, bigger than the Zacks Consensus Estimate for a loss of 98 cents. The bottom line, however, improved from a reported loss of $2.75 per share in the prior quarter.

Boeing’s revenue came in at $17.92 billion, beating the Zacks Consensus Estimate of $17.36 billion by 3.3%. The top line also improved by 28% from the $13.99 billion recorded in the previous quarter.

Hexcel Corporation (HXL Free Report) reported first-quarter 2023 adjusted earnings of 50 cents per share, beating the Zacks Consensus Estimate of 39 cents by 28.2%. The bottom line improved significantly from 22 cents in the prior quarter, highlighting solid growth of 127.3%.

The company posted GAAP earnings of 50 cents per share, compared with 21 cents in the prior quarter.

Lockheed Martin Corporation (LMT Free Report ) reported Q1 2023 adjusted earnings of $6.43 per share, beating the Zacks Consensus Estimate of $6.07 by 5.9%. However, the bottom line was at the same level as the previous quarter.

Net sales came in at $15.13 billion, beating the Zacks Consensus Estimate of $14.87 billion by 1.9%. The top line rose 1.1% from $14.96 billion in the year-ago quarter.

Keep up with upcoming earnings announcements with the Zacks Earnings Calendar.

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