GR Goodrich Corp. (The)

TransDigm Group Incorporated (TDG) reported second-quarter fiscal 2011 earnings per share from continuing operations of 69 cents, below the Zacks Consensus Estimate of 83 cents and prior-year earnings of 72 cents.

Though TransDigm witnessed an impressive sales growth during the quarter, the company’s income was negatively affected by acquisition-related expenses of $12.6 million related to the McKechnie Aerospace and Talley Actuation acquisitions.

Revenue

Net sales were $311.3 million, an increase of 51.1% year over year, excluding $10.3 million of net sales from discontinued operations. Organically, sales during the quarter increased by approximately 11.7%, driven by improved commercial aftermarket and OEM markets. Sales during the quarter were also aided by acquisitions of Semco Instruments, McKechnie Aerospace and Talley Actuation.

Income & Expenses

Income from operations for the quarter was $113.2 million compared with $88.1 million in the prior-year period. Selling and administrative expenses were $33.8 million compared with $23.6 million in the comparable quarter last year.

Excluding results of discontinued operations, EBITDA for the quarter jumped 34.5% to $128.3 million.

Balance Sheet & Cash Flow

Cash and cash equivalents was $505.3 million at the end of the quarter compared with $234.1 million at the end of the prior-year quarter. Long-term debt was $3.1 billion and shareholders equity was $667.0 million.

Net cash from operating activities was $129.2 million compared with $83.8 million in the prior-year quarter.

Divesture

During second quarter of fiscal 2011, the sale of TransDigm’s fastener businesses concluded for approximately $240 million and re-priced TransDigm’s $1.55 billion of bank debt. After the end of the quarter, the company sold its distribution business for approximately $30 million.

Outlook

TransDigm expects total revenue for fiscal 2011 to be in the range of $1,172 million to $1,192 million, up from the prior guidance range of $1,193 million to $1,225 million, including approximately $70 million from the two divestitures.

For fiscal 2011, the company expects earnings per share to be in the range of $2.76 to $2.91, up from the prior guidance of $2.08 to $2.47 per share. Adjusted earnings per share are expected to be in the range of $3.97 to $4.12 per share, up from the prior estimate of $3.70 to $4.09 per share.

Based in Cleveland, Ohio, TransDigm Group Inc.designs, produces, and supplies engineered aircraft components for use on commercial and military aircraft. The company operates principally in the US. Major competitors of the company are Goodrich Corp. (GR), Honeywell International Inc. (HON) and United Technologies Corp. (UTX).

 
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