Preview: TransDigm Gr's Earnings

On Tuesday, February 09, TransDigm Gr TDG will release its latest earnings report. Here is Benzinga's outlook for the company.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and especially earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equals to net income divided by the number of shares outstanding.

Earnings And Revenue

Sell-side analysts expect TransDigm Gr's EPS to be near $2.02 on sales of $1.12 billion. TransDigm Gr reported a profit of $4.93 per share when it published results during the same quarter last year. Sales in that period totaled $1.47 billion.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

If the company were to report earnings in line when it publishes results Tuesday, quarterly profit would be down 59.03%. Sales would be down 23.55% from the same quarter last year. Here is how the company's reported EPS has compared to analyst estimates in the past:

Stock Performance

Shares of TransDigm Gr were trading at $605.01 as of February 05. Over the last 52-week period, shares are down 6.72%. Given that these returns are generally negative, long-term shareholders are likely unhappy going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. TransDigm Gr is scheduled to hold the call at 11:00:00 ET and can be accessed here.