TransDigm sees 2026 profit below estimates on higher interest payments, tariff woes

Feb 3 - Aircraft parts maker TransDigm Group TDG.N on Tuesday forecast 2026 profit below Wall Street estimates, as tariff-fueled price hikes and recent acquisitions have shrunk the company's margins.

The company has been aggressively investing in acquiring smaller peers such as Stellant Systems, Jet Parts Engineering and Victor Sierra Aviation, which has raised its interest expense on loans taken to back those acquisitions.

Besides, rising prices of raw materials due to the U.S. administration's changing trade policies have further pressured parts suppliers, prompting them to jack up their prices.

Shares of the company fell 5% in premarket trading.

The Cleveland, Ohio-based company now sees 2026 adjusted per share profit between $37.42 and $39.34, the midpoint of which is below analysts' average estimate of $39.03 per share, according to data compiled by LSEG.

It also expects annual net income in the range of $1.95 billion to $2.06 billion compared with $2.07 billion a year earlier.

First-quarter net income fell 9.7% to $445 million, compared with $493 million a year earlier, primarily due to higher interest expense toward the company's gross debt balance that has been increasing year over year.

TransDigm's adjusted profit rose to $8.23 per share in the quarter ended December 27, up from $7.83 a year ago.

Net sales rose to $2.29 billion, compared with $2.01 billion a year earlier.