TransDigm Group reported fourth-quarter sales of $2.99 billion on Tuesday, up 23% on a year earlier, but net income fell 4% and its outlook for fiscal 2027 disappointed investors, sending the shares lower in premarket trading.

The aerospace components supplier said net sales rose to $2,988 million in the quarter ended 30 September 2026, from $2,437 million in the same quarter a year earlier. Net income was $586 million, down from $609 million, while earnings per share rose to $10.33 from $7.75.

Adjusted diluted earnings per share increased 15% to $12.44, from $10.82 a year earlier, beating analysts' expectations of $12.22. Revenue also came in above the $2.95 billion consensus forecast.

Profit margin narrows

EBITDA As Defined, the company's preferred measure of operating profit, rose 20% to $1,583 million from $1,320 million. The margin on that measure narrowed to 53.0% from 54.2% a year earlier, as higher interest and tax expenses offset the stronger top line.

Adjusted net income rose 12% to $706 million, or $12.44 per share, from $629 million, or $10.82 per share, in the comparable quarter a year ago.

Chief executive Mike Lisman said fourth-quarter revenue and EBITDA As Defined had exceeded the upper end of the company's latest outlook.

Full-year sales up 20%

For the full fiscal year, sales increased 20% to $10,557 million, while net income rose 2% to $2,108 million and EBITDA As Defined advanced 17% to $5,563 million.

TransDigm designs, produces and supplies highly engineered aircraft components, serving commercial and military aircraft makers and operators. Its products include ignition systems, pumps, valves, actuators and other parts used across a wide range of aircraft.

2027 guidance misses forecasts

The market's focus, however, was on the outlook. TransDigm said it expects fiscal 2027 sales of $11,950 million to $12,150 million, implying growth of about 14% at the midpoint, above the $11.75 billion analysts had expected.

But its adjusted earnings per share guidance of $47.09 to $47.94 came in below forecasts. The midpoint of about $47.52 compared with a consensus estimate of $48.66, and the shares fell about 4% in premarket trading on Tuesday after the results.

The guidance sets up a test for the coming year: TransDigm is still growing sales at a double-digit pace, but investors want to see that growth turn into earnings at the rate they had expected. The company will host a conference call for investors and analysts on Tuesday to discuss the results.

Sources: Stockhouse (TransDigm press release) and InvestorsHub (ADVFN).