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On Mar 29, we issued an updated research report on TriMas Corporation (TRS - Free Report) .
After posting robust first-quarter 2017 results, TriMas reaffirmed its full-year 2017 earnings per share range of $1.35–$1.45. The company will continue to assess product and facility performance under its new model. In addition, its performance improvement plans in the Energy and Aerospace segments, and innovation in the Packaging and Engineered Components segments will drive growth.
TriMas has taken many important realignment actions over the past several months to drive performance. Some actions undertaken in the previous quarter include the rationalization of two facilities in its Energy segment. First, the company exited the Wolverhampton, UK facility, in connection with de-emphasizing certain products. Additionally, in the Energy segment, it decided to change direction on ramping up a new location in Reynosa, Mexico.
TriMas continues to focus on cash generation and related de-leveraging. In the first quarter, the company reduced its net debt by $68 million to $344 million from the prior period last year, and reduced net debt by $9.7 million from the prior quarter. The company ended the quarter with ample liquidity and with leverage ratio of 2.5x as compared to its longer-range target of less than 2x. Free cash flow for the quarter was $17.7 million as compared to use of $5.9 million cash in the same period last year.
Notably, TriMas experienced increased sales levels of its complex fastener products to both OE and distribution customers during the first quarter. The company continues to see more stable order patterns from its distribution customers. It also remains optimistic that improved demand levels will translate into increasing manufacturing efficiencies and operating leverage through the year.
However, TriMas’ results will be adversely affected by currency volatility and uncertainty in the broader macroeconomic environment. Stronger dollar makes product exports more difficult and translation impacts hamper sales of the company’s packaging and energy businesses, in Europe and the UK.
Additionally, lower oil prices have put significant pressure on TriMas. This decline has most directly affected the Arrow Engine business, which serves the upstream oil and natural gas markets at the well site, within its Engineered Components segment.
Moreover, Trimas experienced lower demand from upstream and downstream oil and gas customers, and continued to deemphasize certain underperforming regions and products in its energy segment. Further, in the packaging segment the company believes that the impact of softer sales demand experienced toward the end of the first quarter will continue through the second quarter.
Trimas currently carries a Zacks Rank #3 (Hold).
Share Price Performance
In the last one year, TriMas has outperformed the Zacks classified Metal Products & Fabrication sub-industry with respect to price performance. The stock gained around 33.1%, while the industry recorded growth of 23.3%.
Timken has an earnings ESP of 12.22% for the trailing four quarters. AGCO has an average earnings surprise of 40.39% for the last four quarters, while Altra Industrial Motion has an average earnings surprise of 15.93% for the past four quarters.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
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TriMas (TRS) Reaffirms 2017 Guidance Amid Macro Headwinds
On Mar 29, we issued an updated research report on TriMas Corporation (TRS - Free Report) .
After posting robust first-quarter 2017 results, TriMas reaffirmed its full-year 2017 earnings per share range of $1.35–$1.45. The company will continue to assess product and facility performance under its new model. In addition, its performance improvement plans in the Energy and Aerospace segments, and innovation in the Packaging and Engineered Components segments will drive growth.
TriMas has taken many important realignment actions over the past several months to drive performance. Some actions undertaken in the previous quarter include the rationalization of two facilities in its Energy segment. First, the company exited the Wolverhampton, UK facility, in connection with de-emphasizing certain products. Additionally, in the Energy segment, it decided to change direction on ramping up a new location in Reynosa, Mexico.
TriMas continues to focus on cash generation and related de-leveraging. In the first quarter, the company reduced its net debt by $68 million to $344 million from the prior period last year, and reduced net debt by $9.7 million from the prior quarter. The company ended the quarter with ample liquidity and with leverage ratio of 2.5x as compared to its longer-range target of less than 2x. Free cash flow for the quarter was $17.7 million as compared to use of $5.9 million cash in the same period last year.
Notably, TriMas experienced increased sales levels of its complex fastener products to both OE and distribution customers during the first quarter. The company continues to see more stable order patterns from its distribution customers. It also remains optimistic that improved demand levels will translate into increasing manufacturing efficiencies and operating leverage through the year.
However, TriMas’ results will be adversely affected by currency volatility and uncertainty in the broader macroeconomic environment. Stronger dollar makes product exports more difficult and translation impacts hamper sales of the company’s packaging and energy businesses, in Europe and the UK.
Additionally, lower oil prices have put significant pressure on TriMas. This decline has most directly affected the Arrow Engine business, which serves the upstream oil and natural gas markets at the well site, within its Engineered Components segment.
Moreover, Trimas experienced lower demand from upstream and downstream oil and gas customers, and continued to deemphasize certain underperforming regions and products in its energy segment. Further, in the packaging segment the company believes that the impact of softer sales demand experienced toward the end of the first quarter will continue through the second quarter.
Trimas currently carries a Zacks Rank #3 (Hold).
Share Price Performance
In the last one year, TriMas has outperformed the Zacks classified Metal Products & Fabrication sub-industry with respect to price performance. The stock gained around 33.1%, while the industry recorded growth of 23.3%.
Stocks to Consider
Some better-ranked stocks in the sector include The Timken Company (TKR - Free Report) , AGCO Corporation (AGCO - Free Report) and Altra Industrial Motion Corp. . All three stocks boast a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Timken has an earnings ESP of 12.22% for the trailing four quarters. AGCO has an average earnings surprise of 40.39% for the last four quarters, while Altra Industrial Motion has an average earnings surprise of 15.93% for the past four quarters.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>