TransDigm Group Incorporated (TDG) reported fourth quarter 2009 earnings per share of 82 cents, beating the Zacks Consensus Estimate of 80 cents. Net sales for the quarter rose 4.3% to $197.4 million from $189.2 million in the comparable year-ago quarter. The favorable contribution from acquisitions was partially offset by a 4.6% decline in organic net sales.

The decrease in organic sales was primarily due to lower commercial OEM and aftermarket demand partially offset by strong defense sales. The company completed the acquisition of three proprietary aerospace component businesses and ended the fiscal year in sound financial condition with nearly $190 million in cash and almost $200 million of unutilized capacity under its revolving credit facility.

For 2010, in the Commercial OEM segment, the company is assuming a revenue decline in the mid-single digit percent range. This is based on a reduction in commercial transport rates in the second half of the fiscal year as well as lower business jet revenues.

In the Commercial Aftermarket segment, it anticipates worldwide traffic growth to be modestly down in the first half and increase in the second half, and flattish year over year. This yields a low to mid-single digit percentage revenue growth for the year.

In the Defense segment, it expects a low single digit percentage decline for the year. Net sales for 2010 are anticipated in the range of $770 million to $800 million compared with $762 million in fiscal 2009. Net income is anticipated in the range of $116 million to $126 million compared with $163 million in fiscal 2009.

The fiscal 2010 Net Income will be negatively impacted by the amortization and interest expense relating to the recent bond offering and costs associated with the one-time special dividend. Earnings per share are expected to be in the range of $2.28 to $2.48.

The current Zacks Consensus Estimate stands at $3.04, which excludes one-time charges. TransDigm Group is a leading global designer, producer and supplier of highly engineered aircraft components for use in nearly all commercial and military aircraft in service today.

Major competitors include Goodrich Corporation (GR), Honeywell International (HON) and United Technologies Corporation (UTX). We currently have a Neutral recommendation on TDG.

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