TransDigm Raises Outlook as Sales Growth Accelerates
Organic sales grew 13% as all three major market channels posted double-digit gains.
TransDigm Group (TDG), the aerospace-components maker, raised its full-year outlook after third-quarter net sales climbed 23% to $2.741 billion, extending a four-quarter acceleration in revenue growth.
The quarter marked a broader pickup in underlying demand. Organic growth accelerated to 13% from 11% in the second quarter and 7.4% in the first, while all three major market channels again delivered double-digit gains. Commercial aftermarket revenue rose 17%, building on 16% growth in the preceding quarter.
Adjusted earnings rose 13% to $10.87 a share, accelerating from increases of 8% in the second quarter and 5% in the first. Net income increased 10% to $540 million, though it was nearly unchanged sequentially.
Profit growth trailed the rise in sales. EBITDA As Defined increased 19% to $1.447 billion, while its margin contracted 1.6 percentage points from a year earlier to 52.8%. Acquisition dilution masked margin expansion in its base businesses. The reported margin nevertheless improved sequentially for a second quarter, from 52.4% in the first quarter and 52.6% in the second.
Higher costs also weighed on the comparison. Selling and administrative expense increased about 37% to $332 million, and net interest expense rose about 29% to $514 million, with both growing faster than sales.
TransDigm now expects fiscal 2026 sales of $10.470 billion to $10.550 billion, raising the midpoint by $150 million. Adjusted EPS guidance increased to $40.62 to $41.46, while EBITDA As Defined is projected at $5.490 billion to $5.550 billion with a margin of about 52.5%. The outlook assumes mid-teens commercial OEM growth, low-double-digit commercial aftermarket growth and high-single-digit to low-double-digit defense growth.
The company repurchased $1.0 billion of shares during the quarter and completed the $2.2 billion acquisitions of Jet Parts Engineering and Victor Sierra. Long-term debt rose to $32.621 billion following a $1.5 billion debt offering. TransDigm also agreed to acquire Prince & Izant for about $1.07 billion; the pending deal contributes nothing to the raised fiscal-year guidance.