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Triumph Group (TGI) Down 2.2% Since Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Triumph Group, Inc. (TGI - Free Report) . Shares have lost about 2.2% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? 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 Q3 Earnings Miss, Revenues Beat Estimates
Triumph Group’s adjusted earnings from continuing operations in third-quarter fiscal 2017 (ended Dec 31, 2016) came in at $1.01 per share, missing the Zacks Consensus Estimate of $1.24 by 18.6%. Reported earnings also declined 37.6% from $1.39 per share a year ago.
Total Revenue
In the reported quarter, net sales were $844.9 million, beating the Zacks Consensus Estimate of $840 million by 0.6%. The top line, however, declined 7.6% year over year.
Moreover, organic sales were down 7% primarily due to rate reductions on key Aerospace structures programs, changes in model mix, reduced demand in commercial rotorcraft and foreign exchange rates.
Operational Highlights
In third-quarter fiscal 2017, the company’s operating income was $55.2 million, as against a loss of $126.3 million in the year-ago quarter.
Quarterly Segment Performance
Aerospace Structures:Segment sales were $304.2 million, down from $346.6 million in the year-ago quarter. Operating income was $23.9 million, as against a loss of $210.9 million in the year-ago quarter.
Integrated Systems: Segment sales dipped 5.8% year over year to $256.1 million. Operating income was $51.6 million, down from the year-ago level of $52.3 million.
Precision Components: Segment revenues declined 9.6% to $226.3 million in the reported quarter. The segment reported an operating income of $2.9 million, compared with $24.1 million in the prior-year quarter.
Product Support: Segment sales improved 11.7% year over year to $87.3 million, driven entirely by organic sales. Operating income was $14.7 million, up from the year-ago level of $12.4 million.
Financial Position
As of Dec 31, 2016, Triumph’s cash balance was $35.5 million, compared with $21 million as of Mar 31, 2016. As of Dec 31, 2016, long-term debt (excluding current portion) was $1,470.6 million, compared with $1,374.9 million as of Mar 31, 2016.
Cash used for operations during the quarter was $41.4 million. The company spent $9.2 million as capital expenditure in the quarter.
Guidance
For fiscal 2017, the company continues to expect revenues at around $3.5 billion to $3.6 billion and earnings per share in the range of $3.15–$3.45.
Triumph expects free cash flow in the range of $190–$210 million, up from the previous range of $100–$120 million. The company believes that it will generate sufficient amount to fund restructuring initiatives through fiscal 2017.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
At this time, Triumph Group's stock has a poor Growth Score of 'F', however its Momentum is doing a lot better with a 'B'. Following a similar course, the stock was allocated also 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 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable solely for momentum investors.
Outlook
The stock has a Zacks Rank #5 (Strong Sell). We are expecting a below average return from the stock in the next few months.
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Triumph Group (TGI) Down 2.2% Since Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Triumph Group, Inc. (TGI - Free Report) . Shares have lost about 2.2% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? 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 Q3 Earnings Miss, Revenues Beat Estimates
Triumph Group’s adjusted earnings from continuing operations in third-quarter fiscal 2017 (ended Dec 31, 2016) came in at $1.01 per share, missing the Zacks Consensus Estimate of $1.24 by 18.6%. Reported earnings also declined 37.6% from $1.39 per share a year ago.
Total Revenue
In the reported quarter, net sales were $844.9 million, beating the Zacks Consensus Estimate of $840 million by 0.6%. The top line, however, declined 7.6% year over year.
Moreover, organic sales were down 7% primarily due to rate reductions on key Aerospace structures programs, changes in model mix, reduced demand in commercial rotorcraft and foreign exchange rates.
Operational Highlights
In third-quarter fiscal 2017, the company’s operating income was $55.2 million, as against a loss of $126.3 million in the year-ago quarter.
Quarterly Segment Performance
Aerospace Structures:Segment sales were $304.2 million, down from $346.6 million in the year-ago quarter. Operating income was $23.9 million, as against a loss of $210.9 million in the year-ago quarter.
Integrated Systems: Segment sales dipped 5.8% year over year to $256.1 million. Operating income was $51.6 million, down from the year-ago level of $52.3 million.
Precision Components: Segment revenues declined 9.6% to $226.3 million in the reported quarter. The segment reported an operating income of $2.9 million, compared with $24.1 million in the prior-year quarter.
Product Support: Segment sales improved 11.7% year over year to $87.3 million, driven entirely by organic sales. Operating income was $14.7 million, up from the year-ago level of $12.4 million.
Financial Position
As of Dec 31, 2016, Triumph’s cash balance was $35.5 million, compared with $21 million as of Mar 31, 2016. As of Dec 31, 2016, long-term debt (excluding current portion) was $1,470.6 million, compared with $1,374.9 million as of Mar 31, 2016.
Cash used for operations during the quarter was $41.4 million. The company spent $9.2 million as capital expenditure in the quarter.
Guidance
For fiscal 2017, the company continues to expect revenues at around $3.5 billion to $3.6 billion and earnings per share in the range of $3.15–$3.45.
Triumph expects free cash flow in the range of $190–$210 million, up from the previous range of $100–$120 million. The company believes that it will generate sufficient amount to fund restructuring initiatives through fiscal 2017.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
Triumph Group, Inc. Price and Consensus
Triumph Group, Inc. Price and Consensus | Triumph Group, Inc. Quote
VGM Scores
At this time, Triumph Group's stock has a poor Growth Score of 'F', however its Momentum is doing a lot better with a 'B'. Following a similar course, the stock was allocated also 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 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable solely for momentum investors.
Outlook
The stock has a Zacks Rank #5 (Strong Sell). We are expecting a below average return from the stock in the next few months.