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We expect aerospace company Triumph Group, Inc. (TGI - Analyst Report) to beat expectations when it reports the first quarter of fiscal year 2014 results on Jul 25, 2013.

Why a Likely Positive Surprise?

Our proven model shows that Triumph is likely to beat earnings because it has the right combination of key factors.

Positive Zacks ESP: Expected Surprise Prediction or ESP (Read: Zacks Earnings ESP: A Better Method), which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +3.27%. This is meaningful and a leading indicator of a likely positive earnings surprise for this company.

Zacks #3 Rank (Hold): We note that stocks with Zacks Ranks of #1, 2 and 3 have a significantly higher chance of beating earnings. The Sell rated stocks (#4 and 5) should never be considered going into an earnings announcement.

The combination of Triumph’s Zacks Rank #3 (Hold) and +3.27% ESP make us confident of a positive earnings beat on Jul 25.

What is Driving the Better than Expected Earnings?

We expect the continuing progress in the commercial aviation industry to play an important role to boost Triumph’s near-term performance.

In addition, the company’s strong order book and steady organic as well as inorganic growth strategy are strong catalysts to boost its future results. Triumph supplies several types of products to the airline majors - The Boeing Company (BA - Analyst Report) and Airbus and gets orders from them at regular intervals.

During first-quarter 2013, Triumph acquired Primus Composites from Precision Castparts Corp. (PCP - Analyst Report). This acquisition will complement the company’s operations and will be immediately accretive to its earnings.

The positive trend is seen in the trailing four quarter average surprise of 11.28%. Triumph’s fourth-quarter of fiscal year 2013 surprise was 5.66%. Benefits from the acquisitions, improvement in the aviation industry and cost control aided the surprise.

Other Stocks to Consider

Triumph is not the only organization looking up this earnings season. We see other aerospace players who are likely to beat earnings.

Spirit AeroSystems Holdings, Inc. (SPR - Snapshot Report), Earnings ESP of +4.00% and Zacks Rank #2 (Buy).

Alliant Techsystems Inc. (ATK - Analyst Report), Earnings ESP of +3.13% and Zacks Rank #3 (Hold).

Ducommun Inc. (DCO - Snapshot Report), Earnings ESP of +10.26% and Zacks Rank #3 (Hold).

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