- 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.
Soft Landing Or Recession? This Expert Explains Why Bears Expecting An Imminent Crash May Be Wrong
Analysts have conflicting viewpoints on what's ahead for the U.S. economy and markets, with some warning of an impending recession, while others suggesting that a soft landing is possible. Meanwhile, one analyst is pointing out that bear markets have never ended before the start of a recession.
