Investing.com -- Shares in Transdigm Group Incorporated (NYSE:TDG) soared nearly 4% in after-hours trading, after the S&P Dow Jones Indices announced that the aircraft component manufacturer will join the S&P 500 Composite index on June 2.
TransDigm, a Cleveland-based company which develops, distributes and produces commercial and military aircraft components, will replace Baxalta Inc (NYSE:BXLT) which is being acquired by Ireland pharmaceutical company SHPG at the close of trading on Thursday. Earlier in Friday's session, Baxalta shareholders approved the $32 billion merger between the drug makers. The merger will help create one of the world's leading companies in treating hemophilia.
On Wednesday, TransDigm announced the offering of $950 million of 6.375% senior subordinated notes, due in 2026. The company intends to use the proceeds to help fund a percentage of its acquisition of ILC Holdings, the parent company of Data Device Corporation (DDC). A day earlier, TransDigm announced that it agreed to terms with ILC Holdings to purchase DDC, a leading supplier of databus and power supply products in global aerospace markets for $1 billion in cash. The offering is expected to close on June 9.
During the second quarter of Fiscal Year 2016, TransDigm finished with net sales of $796.8 million for the three-month period ending in early-April, representing a gain of 28.7% on an annual basis. In addition, TransDigm reported earnings of $138.6 million, a spike of 25% from the previous year, as upwardly revised EBITDA surged 28% to $368.6 million.
As a result, the company increased its full-year revenue guidance to a range between $3.151 and $3.181 billion, while raising its annual EPS outlook to a level between 9.89 and 10.13. In 2015, TransDigm earned full-year revenue of $2.707 billion amounting to earnings per share of 7.84.
"We saw signs of improvement in the commercial aftermarket as second quarter sales rose sharply versus the prior year. After a number of quarters of disconnect, these results are encouraging," TransDigm CEO Nicholas Howley said on May 10. "The defense picture was mixed with sales slightly down versus the prior year quarter, but bookings were up significantly.
Shares in TransDigm surged 10.13 or 3.96% to 266.00 in after-hours trading.