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Why Is Triumph Group (TGI) Up 13.3% Since Last Earnings Report?
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It has been about a month since the last earnings report for Triumph Group (TGI - Free Report) . Shares have added about 13.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Triumph Group due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Triumph Group Q3 Earnings Beat Estimates, Sales Dip Y/Y
Triumph Group reported third-quarter fiscal 2022 (ended Dec 31, 2021) adjusted earnings of 21 cents per share, which surpassed the Zacks Consensus Estimate of 20 cents by 5%. The bottom line also surged a solid 133.3% from 9 cents per share.
Including one-time adjustments, TGI generated a GAAP earnings of 11 cents per share in the fiscal third quarter against a loss of $1.30 in the prior-year quarter.
Total Sales
Triumph Group’s net sales in the quarter under review were $319.2 million, which missed the Zacks Consensus Estimate of $369 million by 13.4%. The top line declined 25.1% from $425.9 million in the year-ago quarter.
Considering the impact of divestitures and sunsetting programs, organic sales in the quarter were down 5% year over year, primarily due to declines in commercial wide-body production, partially offset by increases in commercial narrow-body production.
Operational Highlights
In the third quarter of fiscal 2022, Triumph Group generated adjusted operating income of $32.8 million, which declined 13.7% from the year-ago reported figure. Adjusted operating margin of 10.3% expanded 140 basis points from 8.9% in the third quarter of fiscal 2021.
Interest expenses and others amounted to $32.3 million, down 28% from the prior-year quarter.
Triumph Group’s backlog was $1.95 billion, up 4% on a sequential basis from $1.94 billion.
Segmental Performance
Aerospace Structures: The segment’s sales totaled $82.9 million, down 48.9% from $162.4 million in the year-ago quarter. The segment reported an operating loss of $3.5 million in the third quarter of fiscal 2022.
Systems & Support: The segment’s sales declined 10.5% year over year to $236.3 million. Operating income was $40.6 million in the third quarter of fiscal 2022.
Financial Position
As of Dec 31, 2021, TGI’s cash and cash equivalents totaled $206.1 million compared with $589.9 million as of Mar 31, 2021.
Its long-term debt (excluding the current portion) amounted to $1.58 billion as of Dec 31, 2021, compared with $1.95 billion as of Mar 31, 2021.
Net cash used in operating activities for the nine months ended Dec 31, 2021, was $169.9 million compared with net cash outflow of $195.9 million in the same period last year.
Triumph Group’s capital expenditures were $15.8 million in the first nine months of fiscal 2022 compared with $18.9 million in the prior-year period.
Guidance
Triumph Group updated its financial guidance for fiscal 2022. The company now anticipates generating adjusted earnings per share (EPS) in the range of 80-90 cents. The Zacks Consensus Estimate for earnings is pegged at 75 cents, which is less than the newly guided range.
TGI now expects net sales of $1.50 billion in fiscal 2022. The Zacks Consensus Estimate for revenues of $1.55 billion lies above the company’s guided range.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
The consensus estimate has shifted 30.63% due to these changes.
VGM Scores
Currently, Triumph Group has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Triumph Group has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Triumph Group (TGI) Up 13.3% Since Last Earnings Report?
It has been about a month since the last earnings report for Triumph Group (TGI - Free Report) . Shares have added about 13.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Triumph Group due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Triumph Group Q3 Earnings Beat Estimates, Sales Dip Y/Y
Triumph Group reported third-quarter fiscal 2022 (ended Dec 31, 2021) adjusted earnings of 21 cents per share, which surpassed the Zacks Consensus Estimate of 20 cents by 5%. The bottom line also surged a solid 133.3% from 9 cents per share.
Including one-time adjustments, TGI generated a GAAP earnings of 11 cents per share in the fiscal third quarter against a loss of $1.30 in the prior-year quarter.
Total Sales
Triumph Group’s net sales in the quarter under review were $319.2 million, which missed the Zacks Consensus Estimate of $369 million by 13.4%. The top line declined 25.1% from $425.9 million in the year-ago quarter.
Considering the impact of divestitures and sunsetting programs, organic sales in the quarter were down 5% year over year, primarily due to declines in commercial wide-body production, partially offset by increases in commercial narrow-body production.
Operational Highlights
In the third quarter of fiscal 2022, Triumph Group generated adjusted operating income of $32.8 million, which declined 13.7% from the year-ago reported figure. Adjusted operating margin of 10.3% expanded 140 basis points from 8.9% in the third quarter of fiscal 2021.
Interest expenses and others amounted to $32.3 million, down 28% from the prior-year quarter.
Triumph Group’s backlog was $1.95 billion, up 4% on a sequential basis from $1.94 billion.
Segmental Performance
Aerospace Structures: The segment’s sales totaled $82.9 million, down 48.9% from $162.4 million in the year-ago quarter. The segment reported an operating loss of $3.5 million in the third quarter of fiscal 2022.
Systems & Support: The segment’s sales declined 10.5% year over year to $236.3 million. Operating income was $40.6 million in the third quarter of fiscal 2022.
Financial Position
As of Dec 31, 2021, TGI’s cash and cash equivalents totaled $206.1 million compared with $589.9 million as of Mar 31, 2021.
Its long-term debt (excluding the current portion) amounted to $1.58 billion as of Dec 31, 2021, compared with $1.95 billion as of Mar 31, 2021.
Net cash used in operating activities for the nine months ended Dec 31, 2021, was $169.9 million compared with net cash outflow of $195.9 million in the same period last year.
Triumph Group’s capital expenditures were $15.8 million in the first nine months of fiscal 2022 compared with $18.9 million in the prior-year period.
Guidance
Triumph Group updated its financial guidance for fiscal 2022. The company now anticipates generating adjusted earnings per share (EPS) in the range of 80-90 cents. The Zacks Consensus Estimate for earnings is pegged at 75 cents, which is less than the newly guided range.
TGI now expects net sales of $1.50 billion in fiscal 2022. The Zacks Consensus Estimate for revenues of $1.55 billion lies above the company’s guided range.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
The consensus estimate has shifted 30.63% due to these changes.
VGM Scores
Currently, Triumph Group has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Triumph Group has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.