Triumph Group, Inc. ( TGI - Analyst Report ) had a solid fiscal fourth quarter 2012, driven by a healthy demand for its services from the aerospace industry. A positive earnings surprise of 19.9% and the extension of its revolving credit agreement were well-received by the market. With a price-to-book (P/B) ratio of just 1.56, this Zacks #1 Rank (Strong Buy) aerospace systems and components supplier is a solid value pick.

Favorable Announcements

On May 2, Triumph Group reported upbeat fiscal fourth quarter 2012 (ended March 31, 2012) results with earnings per share of $1.57, up 46.7% year over year and 26 cents above the Zacks Consensus Estimate.

Net sales grew 3%, primarily due to a 26.4% rise in revenue from Commercial airlines. Operating margin expanded 350 basis points to 15.4% with all three segments (Aerospace, Aerostructures and Aftermarket Services) benefiting from favorable operating conditions. Backlog at the end of fiscal 2012 increased 3% over the year-ago period to $3.91 billion.

Also, an amendment in Triumph Group’s existing revolving credit agreement increased the credit size from $850 million to $1 billion and extended the maturity term through 2017. This will not only provide immediate liquidity but will also enable Triumph Group to invest for internal growth initiatives and pursue future acquisitions.

Attractive Guidance

For fiscal 2013, Triumph Group anticipates net revenues between $3.5 billion and $3.7 billion with earnings per share at $5.45 to $5.55, reflecting an 8.2% mid-point growth over fiscal 2012.

Estimates Moving Higher

In the last 60 days, the Zacks Consensus Estimate for fiscal 2013 inched up by a penny to $5.61, while the estimate for fiscal 2014 went up by 1.6% to $6.29. These also reflect year-over-year growth of 12.01% for 2013 and 12.09% for 2014.

A Value Play

The chart below clearly shows that after a plunge in 2009, the stock is back on the recovery path. Moreover, the Zacks Consensus Estimate remains on a rising scale in the years ahead.

In addition to a low P/B, Triumph Group is currently trading at a forward P/E multiple of 10.17 and a P/S multiple of 0.83. (A P/S ratio lower than 1.0, a P/E below 15.0 and a P/B ratio under 3.0 generally indicate value.)

Berwyn, Pennsylvania-based, Triumph Group was incorporated in 1993. The company caters to the needs of its customers in the aerospace industry, including commercial and regional airlines, air cargo carriers, as well as OEMs of commercial, regional, business and military aircraft.