Often they'll already have the item in stock so you'll give the mats and receive the item in a single transaction. But essentially yes.
They're hoping to get a crit, which results in two items and allows them to sell the other on the GTN. I don't remember the exact crit chance, but I think it's around 15-20%. If you're selling the items for 2 million, this translates to 300k-400k profit per crafted item on average.
If we're talking about Cybertech, it's a bit more than that. Those crafts have a 10% base crit chance, plus 5% from 10k affection from companion, plus 5% from the legacy droid part, plus the legacy perk for another 3%. So for armorings and mods is 23%