Lowering Estimates but 4Q Beats
- Adjusted 4Q17 (Sept) EPS was $3.48 (vs $3.29 last year), 3 cents above our estimate as a better-than-anticipated operating margin and lower tax rate more than offset sales below what we modeled;
- FY17 EPS increased to a record $12.38 (vs $11.49 in FY16), held back by increased interest expense on debt to fund the $24 per share special dividend in November 2016;
- Our FY18 EPS estimate is now $13.22 (from $13.73 and Company guidance introduced at $12.78-to-$13.42), up 7% from FY17, again impacted by higher interest expense with another $22 special dividend paid in September 2017;
- Our FY19 EPS projection is being introduced at $14.65, up 11% from our FY18 estimate.
TransDigm Group is a holding company. Through its subsidiaries, the company designs, produces and supplies aircraft components for use on commercial and military aircraft. The company's segments are: Power and Control, which develops, produces and markets systems and components that provide power to or control power of the aircraft utilizing electronic, fluid, power and mechanical motion control technologies; Airframe, which develops, produces and markets systems and components that are used in non-power airframe applications utilizing airframe and cabin structure technologies; and Non-aviation, which develops, produces and markets products for non-aviation markets.
Great Lakes Review is located in Cleveland, Ohio, was founded in 1981 and became a division of Wellington Shields & Co. LLC in 2011. Great Lakes Review is a research boutique focused on the fundamentally-oriented investor seeking companies that dominate their respective specialty niche regardless of industry. The objective is to make money for the long-term by gradually accumulating a diversified portfolio from a universe of no more than 30 companies. Although short-term-oriented accounts will be alerted to trading opportunities, aggressive sell recommendations are triggered only by a deterioration in long-term fundamentals, not by short-term blips or investor fancy. Coverage of those names that lose their earnings momentum or earnings predictability may be dropped and replaced with more vital candidates.
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