TransDigm Q4 sales climb and company issues next-year outlook

TransDigm (TDG) reported fourth-quarter net sales of $2.99 billion, up 23% from $2.44 billion a year earlier. Adjusted earnings per share of $12.44 were in line with the $12.33 consensus estimate, and the company issued fiscal 2027 guidance.

Shares rose 1.0% at 11:19 a.m. ET, from a $1,218.85 close.

Here's how the company did:

• Adjusted EPS: $12.44 vs. $10.82 a year earlier, $12.33 consensus estimate
• Net sales: $2.99 billion vs. $2.44 billion a year earlier, $2.98 billion consensus estimate
• EPS: $10.33 vs. $7.75 a year earlier
• EBITDA As Defined: $1.58 billion vs. $1.32 billion a year earlier

Net income fell 4% to $586 million from $609 million. The decline primarily reflects higher interest expense, tied to a larger gross debt balance than a year earlier, and higher tax expense.

Organic sales growth was 14%. The EBITDA As Defined margin was 53.0%, including about two percentage points of dilution from recent acquisitions, versus 54.2% a year earlier.

Fiscal 2027 outlook

The company expects fiscal 2027 net sales of $11.95 billion to $12.15 billion, compared with $10.57 billion in fiscal 2026, an increase of 14% at the midpoint.

Net income is expected at $2.44 billion to $2.49 billion. Earnings per share are expected at $42.06 to $42.91 on 56.7 million weighted average shares.

Adjusted earnings per share are expected at $47.09 to $47.94, compared with $41.35 in fiscal 2026, an increase of 15% at the midpoint. EBITDA As Defined is anticipated at $6.20 billion to $6.35 billion, an increase of 13% at the midpoint, with a margin of about 52.0%.

The outlook assumes commercial OEM revenue growth in the high single-digit to low double-digit percentage range, commercial aftermarket revenue growth in the high single-digit range, and defense revenue growth in the high single-digit range.

Lisman said the company has "the financial flexibility to pursue additional M&A and other capital deployment opportunities."

Acquisitions and capital returns

TransDigm completed its acquisition of Prince & Izant for about $1.07 billion in cash, including certain tax benefits.

During fiscal 2026 the company invested about $4.4 billion in acquisitions, including Simmonds Precision Products, Jet Parts Engineering, Victor Sierra Aviation, Prince & Izant, and twelve bolt-on acquisitions at the Operating Unit level.

In the fourth quarter the company returned $943 million to shareholders through repurchases of 820 thousand shares at an average price of $1,150 per share. For fiscal 2026 it returned $2.8 billion through repurchases of 2.3 million shares at an average price of $1,187.

TransDigm completed a private offering of $3.0 billion of 6.75% senior secured notes due January 2035. It used the net proceeds to repurchase about $1.8 billion of its $2.1 billion outstanding 6.75% senior secured notes due 2028 in a concurrent tender offer, and for general corporate purposes.

Costs and charges

Acquisition transaction and integration-related expenses were $36 million in the quarter, compared with $10 million a year earlier. Refinancing costs were $27 million, compared with $3 million.

For fiscal 2026, net sales rose 20% to $10.56 billion, and EBITDA As Defined rose 17% to $5.56 billion.