TransDigm (TDG) 2021 Q2 Earnings Report Preview

TransDigm Group Incorporated (NYSE:TDG) manufactures a variety of parts for the defense and aerospace market. It makes most of the money by selling spare parts to airlines and commercial aerospace clients. The company has a highly diversified business due to its broad product portfolio. However, it has a special focus on parts that are either hard to manufacture or patent-protected, giving it an edge over rivals.

The Ohio-based company recently announced better-than-expected financial results for the second quarter. TransDigm reported adjusted earnings of $2.58 per share for the three months ended April 3, as compared to $5.10 per share in the same period of 2020. Analysts on average were looking for earnings of $2.51 per share.

Revenue for the quarter declined 17.3 percent on a year-over-year basis to $1,194 million but topped the consensus forecast of $1,170 million. TransDigm also completed the purchase of Cobham Aero Connectivity in a transaction valued at $965 million during the quarter.

Speaking on the results, CEO Kevin Stein said, “The commercial aerospace industry has continued to show signs of recovery in recent months with the distribution of the COVID-19 vaccine and increasing air traffic, especially in certain domestic markets. We also saw another quarter of strong sequential improvement in our commercial bookings. These trends are encouraging and although the pace of the recovery is uncertain, we remain ready to meet the demand as it returns.”

TransDigm shares slightly moved up in the mid-day trading Tuesday following the results. Overall, the stock has not gained any value so far in 2021. The 52-week range of the stock is $303.51-$633.04, while the company’s market value is hovering around $33 billion.