TransDigm Q2 Earnings Surpass Estimates, Sales Increase Y/Y

TransDigm Group Incorporated TDG reported second-quarter fiscal 2025 adjusted earnings of $9.11 per share, which beat the Zacks Consensus Estimate of $8.85 by 2.9%. The bottom line also improved 14% from the prior-year quarter’s figure of $7.99 per share. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

The company reported GAAP earnings of $8.24 per share compared with $6.97 in the year-ago quarter.

The year-over-year growth in the bottom line can be attributed to the increase in net sales and the application of TDG’s value-driven operating strategy, lower one-time refinancing costs and decreased non-cash stock and deferred compensation expense.

TransDigm’s Q2 Sales Discussion

Sales amounted to $2.15 billion, up 12% from $1.92 billion registered in the prior-year period. The reported figure, however, missed the Zacks Consensus Estimate of $2.17 billion by 0.7%.

Organic sales, as a percentage of net sales, grew 6.9%.

Transdigm Group Incorporated Price, Consensus and EPS Surprise

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

TDG’s Operating Results

The gross profit was $1.27 billion, up 10.6% from the year-ago quarter’s level of $1.15 billion.

TDG’s interest expense increased 16% year over year to $378 million.

Net income increased 18.9% year over year to $479 million.

TransDigm’s Financial Position

Cash and cash equivalents as of March 29, 2025, amounted to $2.43 billion, down from $6.26 billion recorded as of Sept. 30, 2024.

Long-term debt totaled $24.31 billion, up from $24.30 billion as of Sept. 30, 2024.

Cash from operating activities amounted to $900 million compared with $865 million at the end of the second quarter of fiscal 2024.

TDG’s 2025 Guidance

TransDigm reaffirmed its guidance for fiscal 2025. It still expects sales to be in the range of $8.75-$8.95 billion. The Zacks Consensus Estimate for the same is pegged at $8.86 billion, just above the midpoint of the company’s guided range.

TDG still expects fiscal 2025 adjusted earnings to be in the band of $35.51-$37.43 per share. The Zacks Consensus Estimate for fiscal 2025 earnings is pegged at $37.09 per share, higher than the midpoint of the company’s guided range.

TDG’s 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 Corporation LMT reported first-quarter 2025 earnings of $7.28 per share, which beat the Zacks Consensus Estimate of $6.34 by 14.8%. The bottom line increased 15% from the year-ago quarter's reported figure of $6.33 per share.

The company’s net sales were $17.96 billion, which beat the consensus estimate of $17.76 billion by 1.1%. The top line also increased 4.5% from $17.20 billion reported in the year-ago quarter.

Northrop Grumman Corporation NOC reported first-quarter 2025 adjusted earnings of $6.06 per share, which missed the Zacks Consensus Estimate of $6.21 by 2.4%.

NOC’s total sales of $9.47 billion in the first quarter missed the consensus estimate of $9.91 billion by 4.4%. The top line also declined 6.6% from $10.13 billion reported in the year-ago quarter.

RTX Corporation’s RTX first-quarter 2025 adjusted earnings per share of $1.47 beat the Zacks Consensus Estimate of $1.35 by 8.9%. The bottom line also improved 9.7% from the year-ago quarter’s level of $1.34 per share, driven by growth in adjusted segment operating profit.

Its first-quarter sales totaled $20.31 billion, which surpassed the consensus estimate of $19.71 billion by 3%. The top line also surged a solid 5.2% from $19.31 billion recorded for the first quarter of 2024.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research