TDG Earnings Prediction
The chart below shows how TDG performed 10 days before and after its earnings report, based on data from the past quarters. Typically, TDG sees a -6.11% change in stock price 10 days leading up to the earnings, and a +1.34% change 10 days following the report. On the earnings day itself, the stock moves by +2.81%. This data can give you a slight idea of what to expect for the next quarter's release.
TDG Key Earning Data
2024/Q4
Year Over Year
Quarter Over Quarter
Total Revenue
2.05B
17.32%
6.62%
Gross Margin
59.09%
3.27%
0.44%
Operating Margin
48.00%
5.56%
3.16%
Net Margin
22.53%
11.65%
7.03%
EPS
7.96
29.64%
14.20%
No Data Available
TDG Earnings Analysis
TransDigm Group Incorporated Corporation (TDG.N) Earnings Conference Call
Positive
Aerospace Revenue Surge: 1. Strong Revenue Growth: TransDigm reported a 20% increase in total commercial OEM revenue for fiscal year 2024 compared to the prior year, indicating robust demand in the aerospace sector.
Strong EBITDA Performance: 2. High EBITDA Margin: The company achieved an EBITDA margin of 52.6% in Q4 2024, reflecting strong operational efficiency and profitability across its segments.
Cash Flow Generation: 3. Significant Cash Flow Generation: TransDigm generated over $570 million in operating cash flow in Q4, contributing to a year-end cash balance of approximately $6.3 billion.
Strong Cash Generation: 4. Robust Free Cash Flow: For fiscal 2024, the company reported free cash flow of roughly $2.3 billion, demonstrating strong cash generation capabilities.
Capital Allocation Milestone: 5. Record Capital Allocation: In fiscal 2024, TransDigm allocated approximately $6.5 billion across M&A and shareholder returns, including a special dividend of $75 per share, the largest in its history.
Negative
OEM Revenue Decline: 1. Declining OEM Revenue: Total commercial OEM revenues contracted by 4% sequentially in Q4, indicating a slowdown in production rates and a challenging environment for OEMs.
Commercial Aftermarket Performance: 2. Weak Commercial Aftermarket Growth: The 8% year-over-year growth in commercial aftermarket revenue for Q4 was below expectations, suggesting potential softness in future bookings and revenue performance.
Debt-to-EBITDA Ratio Increase: 3. Increased Debt-to-EBITDA Ratio: Pro forma for the $75 dividend, the net debt-to-EBITDA ratio increased to 5.4 times, indicating a higher leverage position that may raise concerns about financial stability.
Cost Reduction Strategies: 4. Cost Reduction Initiatives: The company initiated cost reduction measures, including furloughs and headcount reductions, in response to anticipated lower OEM production rates in fiscal 2025, reflecting a need to adjust to a challenging market environment.
Q1 Revenue Outlook Decline: 5. Lower Q1 Revenue Expectations: Fiscal 2025 Q1 revenues, EBITDA, and EBITDA margins are anticipated to be lower than the other three quarters, primarily due to 10% fewer working days and recent softness in bookings.
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TDG Earning Call Sentiment
TransDigm Group Incorporated (TDG) Q3 2024 Earnings Call Transcript
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00:00
00:00
TDG.N
0.18%Positive
The earnings call highlights strong financial performance with increased revenue and EBITDA guidance, robust defense and commercial OEM growth, and a significant special dividend. The Q&A section reveals optimism in market growth despite some uncertainties in the aftermarket and OEM contract renegotiations. The company's solid cash position and shareholder return plans further support a positive outlook. However, management's unclear responses on certain issues and potential margin dilution are minor concerns. Overall, the positive aspects outweigh the negatives, leading to a predicted stock price increase between 2% to 8%.