- TransDigm Group Inc (NYSE:TDG) reported second-quarter FY23 sales growth of 20% year-over-year to $1.59 billion, +17.6% on an organic basis, beating the consensus of $1.52 billion.
- Adjusted EPS improved 55% Y/Y to $5.98, beating the consensus of $5.45.
- The gross margin expanded by 290 bps to 58.4%. The operating income increased by 33.7% Y/Y to $695 million, and the margin expanded by 447 bps to 43.7%.
- Income from continuing operations increased 52.8% Y/Y to $304 million.
- EBITDA, as Defined, increased by 29.1% Y/Y to $817 million, and the margin expanded by 362 bps to 51.3%.
- TransDigm generated cash from operating activities year-to-date of $507 million, compared to $366 million a year ago. It held cash and equivalents of $4.5 billion as of April 1, 2023.
- During the quarter TransDigm completed two refinancings, the net effect of which was to extend its 2025 debt maturities out into 2028.
- The company raised its FY23 financial guidance to reflect the continued strong performance and include the acquisition of Calspan Corporation.
- FY23 Outlook raised: TransDigm now expects Net sales of $6.41 billion-$6.5 billion (prior $6.07 billion-$6.24 billion), versus consensus of $6.17 billion, and EPS from continuing operations of $19.30-$20.18 (prior $18.24-$19.64).
- It sees EBITDA As Defined of $3.23 billion- $3.29 billion (prior $3.06 billion-$3.16 billion).
- Adjusted EPS of $23.31-$24.19 (prior $21.47-$22.87) versus consensus of $22.35.
- Price Action: TDG shares are trading higher by 3.70% at $800.88 on the last check Tuesday.
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