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Will Air Travel Demand Aid TransDigm's (TDG) Q4 Results?

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TransDigm Group Incorporated (TDG - Free Report) is slated to report fiscal fourth-quarter 2023 results on Nov 9 before market open.

TransDigm delivered a four-quarter average earnings surprise of 10.41%. The recovery in the commercial aerospace market and strong demand trends in air travel are likely to be favorable for TDG’s fourth-quarter results.

Power & Control Segment to Remain Robust

Strong sales from the commercial aftermarket, defense and commercial original equipment manufacturer businesses are likely to have aided this segment’s revenue performance in the fiscal fourth quarter.

The Zacks Consensus Estimate for the Power & Control segment’s fiscal fourth-quarter revenues is pegged at $930.7 million.

Airframe Segment to Boost Revenues

Sales from the Airframe segment are likely to have been boosted in the fourth quarter by the strong air travel growth that is driving the demand for narrow-body and wide-body aircraft.

The Zacks Consensus Estimate for the segment’s fiscal fourth-quarter revenues is pegged at $851.6 million.

Q4 Estimates

Strength in the demand for air travel is likely to have added impetus to TDG’s fourth-quarter top line and provided it with a significant boost. The Zacks Consensus Estimate for sales is pegged at $1.84 billion, indicating an improvement of 21.7% from the prior-year recorded number.

A strong top line is likely to have boosted its overall margin performance, thus contributing to its fourth-quarter bottom line. The Zacks Consensus Estimate for fiscal fourth-quarter earnings is pegged at $7.51 per share, indicating an increase of 36.6% 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. 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, which is not the case here.

Earnings ESP: The company’s Earnings ESP is -1.09%. 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 #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Here are two defense players you may want to consider as these have the right combination of elements to post an earnings beat this season:

Spire Global, Inc. (SPIR - Free Report) has an Earnings ESP of +20.61% and a Zacks Rank #3. The company delivered an earnings surprise of 30.00% in the last reported quarter.

The Zacks Consensus Estimate for Spire’s third-quarter earnings, pegged at a loss of 66 cents per share, indicates a decline from the prior-year reported figure. The Zacks Consensus Estimate for SPIR’s sales implies a growth rate of 29.2% from the prior-year reported figure.

Rocket Lab USA (RKLB - Free Report) has an Earnings ESP of +11.11% and a Zacks Rank #3. The company delivered a negative four-quarter earnings surprise of 8.33%

The Zacks Consensus Estimate for RKLB’s third-quarter earnings, pegged at a loss of 9 cents per share, implies a decline from the prior-year reported figure. The Zacks Consensus Estimate for its sales calls for a growth rate of 6.9% from the prior-year reported figure.

A Recent Defense Release

Kratos Defense & Security Solutions, Inc. (KTOS - Free Report) reported third-quarter 2023 adjusted earnings of 12 cents per share, up 50% from 8 cents reported in the prior-year quarter. The bottom line also surpassed the Zacks Consensus Estimate of 8 cents by 50%.

Total revenues were $274.6 million, which surpassed the Zacks Consensus Estimate of $252 million by 9%. Total revenues also increased 20.1% from $228.6 million recorded in the year-ago quarter.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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