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30 January
Will Solid Segmental Sales Boost TransDigm's Q1 Earnings?

TransDigm Group Incorporated TDG is slated to report first-quarter fiscal 2025 results on Feb. 4, before market open.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

TransDigm delivered a trailing four-quarter average earnings surprise of 8.43%. The improving growth trends in commercial air travel and strong defense sales are likely to have bolstered the quarterly performance.

TDG’s Power & Control Segment to Remain Robust

Strong sales from the commercial aftermarket, backed by steadily improving commercial air travel demand and the resulting higher flight hours and utilization of aircraft, are likely to have contributed favorably to revenues from the Power & Control segment. Improved sales from the commercial original equipment manufacturer (OEM) businesses, driven by continued recovery in both narrow-body and wide-body aircraft, are also expected to have bolstered this segment’s top line.

Also, an improving U.S. government defense spending trend is likely to have added an impetus to the defense part of the Power & Control segment in the fiscal first quarter.

The Zacks Consensus Estimate for the Power & Control segment’s fiscal first-quarter revenues is pegged at $977 million, indicating a 10.4% improvement from the year-ago quarter’s figure.

Transdigm Group Incorporated Price and EPS Surprise

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

TDG’s Airframe Segment Likely to Report Revenue Growth

Sales from the Airframe segment are likely to have been boosted by the strong air travel growth and rising demand for this unit’s defense products, backed by solid government funding support.

The Zacks Consensus Estimate for the segment’s fiscal first-quarter revenues is pegged at $935.1 million, indicating 8.5% growth from the prior-year quarter’s actual.

Q1 Estimates for TDG

Strong sales expectations from both of its primary segments, which constitute approximately 97% of TDG’s total revenues, are likely to have bolstered its overall quarterly revenue performance.

The Zacks Consensus Estimate for TDG’s fiscal first-quarter sales is pegged at $1.99 billion, indicating an improvement of 11.5% from the prior-year number.

A strong top line is likely to have boosted TDG’s overall margin performance, thereby contributing favorably to its quarterly bottom line.

The Zacks Consensus Estimate for earnings is pegged at $9.25 per share, indicating an increase of 15.2% from the year-ago figure.

However, the persistent OEM supply-chain issues and the lingering effects of the machinist's strike at Boeing (which was resolved in November 2024) are expected to have some adverse impact on the overall fiscal first-quarter results of TDG.

Moreover, the company expects weak bookings to have had some effect on its commercial aftermarket revenue growth.

What the Zacks Model Unveils for TDG

Our proven model predicts an earnings beat 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 an earnings beat, which is the case here, as you will see below.

TDG’s Earnings ESP: TDG has an Earnings ESP of +2.10%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

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

Other Stocks to Consider

Below we have mentioned the following players from the same sector that also have the right combination of elements to beat on earnings in the upcoming releases.

Leidos Holdings, Inc. LDOS is set to report fourth-quarter 2024 earnings on Feb. 11, 2025, before market open. It has an Earnings ESP of +12.08% and a Zacks Rank of 2 at present.

The Zacks Consensus Estimate for LDOS’ earnings is pegged at $2.18 per share. The consensus estimate for its sales is pegged at $4.12 billion, indicating year-over-year growth of 3.6%.

Huntington Ingalls Industries, Inc. HII is set to report its fourth-quarter 2024 results on Feb. 6, before market open. It has an Earnings ESP of +8.35% and a Zacks Rank of 3 at present.

The Zacks Consensus Estimate for HII’s earnings is pegged at $3.28 per share. The consensus estimate for its sales is pegged at $3.03 billion.

CurtissWright CW is set to report its fourth-quarter results on Feb. 12, after market close. It has an Earnings ESP of +1.24% and a Zacks Rank of 3 at present.

The Zacks Consensus Estimate for CW’s earnings is pegged at $3.08 per share. The consensus estimate for its sales is pegged at $785.5 million.

5 Stocks Set to Double

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Transdigm Group Incorporated (TDG) : Free Stock Analysis Report

Huntington Ingalls Industries, Inc. (HII) : Free Stock Analysis Report

Curtiss-Wright Corporation (CW) : Free Stock Analysis Report

Leidos Holdings, Inc. (LDOS) : Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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