TransDigm Group (NYSE:TDG) shares fell 2.6% in pre-market trading on Wednesday, after the aerospace components manufacturer issued fiscal 2026 guidance that disappointed some investors, despite posting strong fourth-quarter results ahead of analyst forecasts.
The company reported adjusted earnings of $10.82 per share for the fourth quarter, topping consensus estimates of $10.07. Revenue rose 11.5% year-over-year to $2.44 billion, slightly above analyst expectations of $2.4 billion, and up from $2.19 billion in the same period last year.
For fiscal 2026, TransDigm projected adjusted earnings between $36.49 and $38.53 per share, with a midpoint of $37.51, roughly matching analyst expectations of $36.60. The company forecast revenue between $9.75 billion and $9.95 billion, well above the consensus estimate of $8.79 billion, but the muted earnings growth appeared to temper investor enthusiasm.
“We are pleased with our team’s performance and operating results for both the fourth quarter and full fiscal year,” said Mike Lisman, TransDigm’s President and CEO. “Our strong fourth quarter finish resulted in surpassing the high end of our most recently issued fiscal 2025 revenue and EBITDA As Defined guidance.”
The company reported an EBITDA margin of 54.2%, an improvement of 160 basis points from the prior year, citing “continued execution on our value drivers and effective management of our cost structure.” Both commercial aftermarket and defense sales grew by double digits, while commercial OEM revenue increased in the high single digits.
Looking ahead, TransDigm expects its commercial OEM segment to lead growth in fiscal 2026, supported by rising aircraft production rates. The company also anticipates continued expansion across both commercial aftermarket and defense markets.
During fiscal 2025, TransDigm deployed about $6.7 billion in capital, including $0.9 billion for two aerospace acquisitions and $5.8 billion returned to shareholders through a $5.2 billion dividend and $0.6 billion in share buybacks.