Yahoo Finance Will Growing Air Travel Aid TransDigm's (TDG) Q2 Earnings?
TransDigm Group Incorporated TDG is slated to report fiscal second-quarter 2023 results on May 9, before market open.
TransDigm delivered a four-quarter average earnings surprise of 7.60%. Growth in air travel demand and cost management efforts are likely to boost the company’s upcoming results.
Power & Control Segment to Boost Revenues
Recent rapid growth in the domestic air travel, along with steady recovery witnessed in the international air traffic with China having reopened its air travel in January, is expected to have boosted organic sales of TDG’s commercial original equipment manufacturer (OEM) and commercial aftermarket businesses.
This, in turn, is likely to have contributed to the Power & Control segment’s revenues in the soon-to-be-reported quarter.
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Also, solid bookings in the prior quarters might have benefited this segment’s defense revenues in the soon-to-be-reported quarter.
The Zacks Consensus Estimate for the Power & Control segment’s fiscal second-quarter revenues is pegged at $773.6 million, indicating an improvement of 9.3% from the year-ago quarter’s level.
Airframe Segment – Another Revenue Contributor
Thanks to the solid air travel demand in recent times, continued recovery in both narrow-body and wide-body aircraft production and deliveries must have bolstered the Aiframe segment’s top-line growth in the to-be-reported quarter.
The Zacks Consensus Estimate for the segment’s fiscal second-quarter revenues is pegged at $680.9 million, implying a 17.6% increase from the year-ago quarter’s recorded figure.
Q2 Estimates
With the majority of TransDigm’s segments anticipated to report an improvement in sales, it makes one optimistic about the company’s top-line growth in the quarter to be reported. The Zacks Consensus Estimate for sales is pegged at $1.50 billion, indicating an improvement of 13.3% from the prior-year recorded number.
The company’s operational excellence and efforts to minimize cost are expected to have boosted its bottom line. Also, continued recovery in commercial aftermarket revenues is likely to have benefited TDG’s quarterly margin, thereby increasing earnings.
The Zacks Consensus Estimate for fiscal second-quarter earnings is pegged at $5.42 per share, indicating an increase of 40.4% from the year-ago reported figure.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for TransDigm this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that is not the case here.
Earnings ESP: The company’s Earnings ESP is -1.23%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: TransDigm carries a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
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