TransDigm Group Inc (NYSE:TDG) reported third-quarter revenue that missed analyst expectations on Tuesday, despite raising its full-year EBITDA and earnings guidance. Following the announcement, shares slid 7.39% in pre-market trading.
The aircraft components maker posted third-quarter revenue of $2.24 billion, a 9.3% increase year-over-year but below the consensus estimate of $2.29 billion. Adjusted earnings per share came in at $9.60, missing the $9.86 forecast.
The company cited weaker-than-expected commercial OEM market performance due to “lower than anticipated OEM build rates and inventory destocking.” This led TransDigm to cut its full-year sales guidance to a range of $8.76 billion to $8.82 billion from its earlier forecast, falling short of the consensus $8.87 billion.
Despite the revenue miss, TransDigm achieved an EBITDA As Defined margin of 54.4%, up about 110 basis points from the prior year, prompting the company to raise its full-year EBITDA and adjusted earnings outlook.
“Our commercial aftermarket and defense markets performed well this quarter, and as expected, growth within the commercial aftermarket continued to moderate,” said President and CEO Kevin Stein. “Our teams successfully navigated the challenges that came with the uneven demand in our commercial OEM market.”
TransDigm kept its growth projections for commercial aftermarket and defense markets, expecting high single-digit to low double-digit percentage increases. However, it revised its commercial OEM revenue growth forecast to flat to low single-digit gains.
The company also highlighted recent acquisitions, completing the purchase of Servotronics, Inc., and agreeing to acquire Simmonds Precision Products from RTX Corporation, with over $900 million in capital planned for these deals.
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