Triumph Group, Inc.

Triumph Group, Inc. (TGI - Analyst Report), the aviation parts manufacturer, continued its streak of beating Wall Street estimates as it recently surprised on estimates by 19.82% in the third-quarter 2009 and has now surprised 4 quarters in a row by an average of 24.39%. The stock is cheap. It trades with a PEG of 0.68.

Company Description

Triumph Group designs and manufactures aerospace systems and components for the aviation industry including commerical and regional airlines, air cargo carriers and Original Equipment Manufacturers (OEMs) that service commercial, regional, business and military customers.

The company operates in 2 segments: Aerospace Systems Group and Aftermarket Services Group.

Earnings Per Share Jump 33% in the Third Quarter of 2009

On Jan 29, Triumph Group reported third quarter earnings that surprised on analysts' estimates by 19.82%, or 22 cents per share. Net income rose 26% to $21.2 million from $16.7 million in the third quarter of the prior year. Earnings per share climbed 33% to $1.33 from $1.30 per share in last year's quarter. Analysts expected EPS of $1.11.

Sales increased 4% to $285.2 million from $275.1 million. Both segments saw sales increases.

The Aerospace Systems segment saw sales rise 5% but were impacted by the Boeing strike. Adjusting for the Boeing strike, organic sales were up 9% year-over-year. The Aftermarket Services segment grew organically by 1% to $63.1 million from $62.7 million in the prior year period.

For the first 9 months of fiscal year 2009, sales rose 12% over 2008. Backlog increased to $1.28 billion, an increase of 4% over fiscal 2008 and 2% from the prior quarter.

Guidance for the Remainder of Fiscal Year 2009

Going into the fourth-quarter 2009, the company maintained its prior EPS guidance of $5.40 per share for the full year given the strong backlog.

Consensus Estimates Rise for 2010

2009 consensus estimates have fallen to the company's recent forecast of $5.40 per share. However, analysts expect 2010 earnings growth of 12.45%. 2010 consensus estimates have risen by 9 cents to $6.07 per share in the last 30 days.

Value Fundamentals

Triumph Group is a Zacks #1 Rank (strong buy) stock. It is trading at only 7.6x forward earnings and has a price-to-book of 0.99. TGI has a solid 1-year return on equity (ROE) of 13.11%. As an added bonus, Triumph Group pays a dividend with a current yield of 0.40%.

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