D-Wave Quantum falls nearly 3% as earnings miss overshadows revenue beat
NEW YORK - On Tuesday, TransDigm Group Inc (NYSE:TDG) reported third-quarter revenue that missed analyst expectations, despite raising its full-year EBITDA and earnings guidance.
The aircraft components manufacturer shares fell 7.39% in pre-market trading after the release.
The company reported third-quarter revenue of $2.24 billion, up 9.3% YoY but below the analyst consensus of $2.29 billion. Adjusted earnings per share came in at $9.60, missing estimates of $9.86.
TransDigm’s commercial OEM market underperformed expectations, which the company attributed to "lower than anticipated OEM build rates and inventory destocking." This weakness prompted the company to lower its full-year sales guidance to $8.76-8.82 billion from its previous forecast, below the consensus of $8.87 billion.
Despite the revenue shortfall, TransDigm managed to deliver an EBITDA As Defined margin of 54.4%, up approximately 110 basis points from the prior year period. This strong margin performance led the company to raise its full-year EBITDA and adjusted earnings guidance.
"Our commercial aftermarket and defense markets performed well this quarter, and as expected, growth within the commercial aftermarket continued to moderate," said Kevin Stein, TransDigm’s President and CEO. "Our teams successfully navigated the challenges that came with the uneven demand in our commercial OEM market."
The company maintained its market growth assumptions for commercial aftermarket and defense, both expected in the high single-digit to low double-digit percentage range. However, it revised its commercial OEM revenue growth forecast to flat to low single-digit percentage range.
TransDigm also highlighted recent acquisition activity, including the completed purchase of Servotronics, Inc. and an agreement to acquire Simmonds Precision Products from RTX Corporation, with over $900 million in capital expected to be deployed for these acquisitions.
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