TransDigm Reports 23% Quarterly Sales Growth and Issues Fiscal 2027 Outlook

TransDigm Group reported a 23% increase in fiscal fourth-quarter sales and issued a fiscal 2027 forecast calling for another year of double-digit revenue growth. The aircraft-components supplier posted $2.99 billion in quarterly sales and expects between $11.95 billion and $12.15 billion for the new fiscal year.

The Cleveland-based company said sales for the quarter ended September 30, 2026, rose from $2.44 billion a year earlier. Adjusted earnings per share increased 15% to $12.44, although reported net income fell 4% as higher interest and tax expenses offset part of the benefit from increased sales.

The outlook follows a year of large acquisitions and share repurchases. TransDigm reported $10.56 billion in fiscal 2026 sales, up 20%, while its management forecast puts fiscal 2027 revenue growth at approximately 14% at the midpoint of the new range.

Higher sales came with a narrower adjusted margin

According to TransDigm’s November 10 earnings release, fourth-quarter revenue climbed by $551 million to $2.988 billion from $2.437 billion in the comparable period. The company reported organic sales growth equivalent to 14% of net sales, separating underlying expansion from the effect of acquired businesses.

Quarterly EBITDA As Defined, TransDigm’s preferred adjusted operating-profit measure, increased 20% to $1.583 billion from $1.320 billion. That was slower than sales growth. The associated margin declined to 53.0% from 54.2% a year earlier, with management attributing approximately two percentage points of margin dilution to recent acquisitions.

Reported net income moved in the opposite direction from revenue, dropping to $586 million from $609 million. TransDigm attributed the decline primarily to increased interest expense, reflecting a higher year-over-year debt balance, and higher tax expense. Adjusted net income nevertheless rose 12% to $706 million from $629 million, reflecting the difference between the company’s reported earnings and its adjusted measures.

The earnings-per-share comparisons were stronger than the net income figures. Reported earnings per share rose 33% to $10.33 from $7.75, and adjusted earnings per share increased to $12.44 from $10.82. The company’s substantial share repurchases provide important context for per-share results, though the earnings release separately identifies interest and tax expense as the main reasons for the net income decline.

For the full fiscal year, sales rose to $10.557 billion from $8.831 billion, a gain of 20%. TransDigm reported an organic sales growth measure of 11% of net sales, or 13% when non-aerospace sales were excluded. Fiscal 2026 net income grew 2% to $2.108 billion, while adjusted earnings per share increased to $41.35 from $37.33.

Full-year EBITDA As Defined rose 17% to $5.563 billion. Its margin fell to 52.7% from 53.9% in fiscal 2025. The decline is a relevant qualification to the revenue growth story: acquired businesses added scale, but they also reduced the consolidated adjusted margin in the period.

Acquisitions, debt financing and buybacks shaped fiscal 2026

TransDigm said it deployed more than $7 billion of capital during fiscal 2026 through acquisitions and share repurchases. About $4.4 billion went into acquisitions, including Simmonds Precision Products, Jet Parts Engineering, Victor Sierra Aviation and Prince & Izant, along with 12 smaller purchases at the operating-unit level.

The most recent named purchase was Prince & Izant, completed September 28 for approximately $1.07 billion in cash, according to the company. The business makes brazing alloys and specialty metal components used in aerospace and defense, among other markets. Its addition expands TransDigm’s portfolio beyond the aircraft parts that form the core of the group.

Capital deployment was not limited to buying businesses. TransDigm repurchased approximately $943 million of its common stock in the fourth quarter, covering about 820,000 shares at an average price of $1,150 each. For the full fiscal year, repurchases totaled approximately $2.8 billion, representing about 2.3 million shares at an average price of $1,187.

Debt financing remained a notable part of the financial picture. In September, TransDigm issued $3.0 billion of new 6.75% senior secured notes due in January 2035. It used part of the proceeds to repurchase approximately $1.8 billion of its outstanding 6.75% senior secured notes due in 2028 through a tender offer, with other proceeds available for general corporate purposes.

That activity helps explain the contrast between strong adjusted operating performance and a decline in quarterly net income. The company has been expanding through purchases while maintaining a sizable debt-funded capital structure. Higher interest expense can reduce earnings attributable to shareholders even when sales and adjusted operating profit increase.

Fiscal 2027 forecast assumes growth across aerospace markets

For the fiscal year ending September 30, 2027, TransDigm expects net sales of $11.95 billion to $12.15 billion. The midpoint of $12.05 billion implies an increase of about 14% from fiscal 2026. Management projects net income of $2.442 billion to $2.490 billion, approximately 17% higher at the midpoint than the $2.108 billion reported in the year just ended.

The company forecast reported earnings per share of $42.06 to $42.91, compared with $35.51 in fiscal 2026. Adjusted earnings per share are expected to reach $47.09 to $47.94, compared with $41.35 in fiscal 2026, an increase of about 15% at the midpoint. Both per-share ranges are based on a projected weighted-average share count of 56.7 million.

TransDigm guided to EBITDA As Defined of $6.195 billion to $6.345 billion, approximately 13% above fiscal 2026 at the midpoint. Its projected adjusted margin of roughly 52.0% is below the 52.7% recorded in fiscal 2026, so the company is forecasting further dollar growth in its adjusted profit measure without a corresponding margin increase.

The forecast rests on growth in the company’s three principal markets. TransDigm expects commercial original-equipment revenue to rise at a high-single-digit to low-double-digit rate, with commercial aftermarket and defense revenue each increasing at a high-single-digit rate. Those are management assumptions, not guaranteed outcomes, and actual results will depend on aircraft production, parts demand and other operating conditions.

Chief Executive Officer Mike Lisman said fourth-quarter revenue and EBITDA As Defined exceeded the upper end of the company’s most recent guidance. His comments also placed the new outlook in the context of recent acquisitions and available liquidity, with management signaling that it may continue looking for businesses to buy or other ways to deploy capital. The fiscal 2027 ranges provide the benchmark against which that growth strategy will be measured.