TransDigm (TDG) FQ3 2026: Sales +23%, Net Income Up Only 10%
TransDigm's commercial aftermarket — the highest-margin, most defensible part of the business — grew 30.1% year over year in the quarter ended June 27, 2026, and total sales rose 22.5% to $2,741 million. Yet net income attributable to TD Group advanced only 9.5% to $539 million, because net interest expense climbed 29.5% to $514 million and now consumes 41.9% of operating income. That gap between the top line and the bottom line is the whole story of this filing: the operating business is performing, and the capital structure is taking an increasing share of the result. For a company carrying $33.5 billion of financial debt against a $9.8 billion stockholders' deficit, the question is no longer whether aftermarket demand is strong — it plainly is — but whether it is compounding faster than the cost of the balance sheet that funds it.
This report covers TransDigm's fiscal third quarter of 2026, the thirteen weeks ended June 27, 2026 (calendar Q2 2026). TransDigm's fiscal year ends September 30.
1. Condensed Consolidated Balance Sheet
1-1. Principal asset lines
| Item | Sept 30, 2025 ($M) | June 27, 2026 ($M) | Change % |
|---|---|---|---|
| Cash and cash equivalents | 2,808 | 2,773 | −1.2 |
| Trade accounts receivable—net | 1,617 | 1,817 | +12.4 |
| Inventories—net | 2,095 | 2,586 | +23.4 |
| Property, plant and equipment—net | 1,579 | 1,740 | +10.2 |
| Goodwill | 10,612 | 12,166 | +14.6 |
| Other intangible assets—net | 3,454 | 4,724 | +36.8 |
| Total assets | 22,909 | 26,754 | +16.8 |
The $3,845 million increase in total assets is almost entirely an acquisition artifact. Goodwill rose $1,554 million and other intangibles $1,270 million, together accounting for 73% of the asset growth. Goodwill and intangibles now represent 63.1% of the balance sheet, up from 61.4%, which is the structural signature of a serial acquirer that buys proprietary aerospace franchises rather than factories.
