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Triumph Group (TGI) Q2 Earnings Drop Y/Y, Misses On Revenues
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Triumph Group Inc.’s (TGI - Free Report) adjusted earnings from continuing operations in second-quarter fiscal 2018 (ended Sep 30) came in at 52 cents per share, reflecting a decline of 48% from $1.00 per share a year ago. The downside was on account of deterioration in revenue as well as operating income of the company.
The company reported GAAP loss of 11 cents per share, compared to the prior year quarter’s earnings of 70 cents a share.
Total Revenues
In the reported quarter, net sales were $745.2 million, lagging the Zacks Consensus Estimate of $795 million by 6.3%. The top line also declined 14.8% year over year.
Organic sales in the quarter were down 12%, primarily due to the completion of and production rate reductions on previously disclosed programs along with the timing of deliveries on certain programs.
Operational Highlights
In the fiscal second quarter, the company’s operating income was $18.8 million, down from $70.5 million in the year-ago quarter.
Interest expense and other during the quarter was $25.4 million, up from $17.9 million in the year-ago quarter.
Quarterly Segment Performance
Aerospace Structures: Segment sales were $249.3 million, down 22.2% from $320.3 million in the year-ago quarter. Operating income for the segment was $11.5 million, compared with $24.9 million in the year-ago quarter.
Integrated Systems: Segment sales dipped 4.7% year over year to $233.8 million. Operating income was $42.1 million, down from the year-ago level of $45.8 million.
Precision Components: Segment revenues declined 11.7% to $229.2 million in the reported quarter. However, the segment incurred an operating loss of $1.6 million as against an income of $12.1 million in the prior-year quarter.
Product Support: Segment sales dropped 20.3% year over year to $68.4 million in the quarter. Operating income was $11.2 million in the fiscal second quarter compared with the year-ago quarter’s $14.3 million.
Triumph Group, Inc. Price, Consensus and EPS Surprise
As of Sep 30, 2017, Triumph Group’s cash and cash equivalents were $33.7 million compared with $69.6 million as of Mar 31, 2017. As of Sep 30, 2017, long-term debt (excluding current portion) was $1.41 billion compared with $1.04 million as of Mar 31, 2017.
Cash outflow from operations during the reported quarter was $200 million compared with outflow of $47.2 million in the prior-year quarter. The company spent $10.7 million as capital expenditure in the quarter compared with $11.2 million in the prior-year quarter.
Guidance
The company reaffirmed net sales guidance of $3.1 to $3.2 billion and continues to expect organic sales growth in fiscal 2019. Management additionally maintained guidance for adjusted earnings per diluted share of $2.25-$2.75 and free cash use of $450-$500 million
Peer Releases
Orbital ATK, Inc. posted third-quarter 2017 adjusted earnings of $1.75 per share, beating the Zacks Consensus Estimate of $1.56 by 12.2%.
Raytheon Company reported third-quarter 2017 earnings from continuing operations of $1.97 per share, beating the Zacks Consensus Estimate of $1.90 by 3.7%.
Textron Inc. (TXT - Free Report) reported third-quarter 2017 adjusted earnings from continuing operations of 65 cents per share, beating the Zacks Consensus Estimate of 62 cents by 4.8%.
Zacks Rank
Triumph Group currently carries a Zacks Rank #4 (Sell).
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Triumph Group (TGI) Q2 Earnings Drop Y/Y, Misses On Revenues
Triumph Group Inc.’s (TGI - Free Report) adjusted earnings from continuing operations in second-quarter fiscal 2018 (ended Sep 30) came in at 52 cents per share, reflecting a decline of 48% from $1.00 per share a year ago. The downside was on account of deterioration in revenue as well as operating income of the company.
The company reported GAAP loss of 11 cents per share, compared to the prior year quarter’s earnings of 70 cents a share.
Total Revenues
In the reported quarter, net sales were $745.2 million, lagging the Zacks Consensus Estimate of $795 million by 6.3%. The top line also declined 14.8% year over year.
Organic sales in the quarter were down 12%, primarily due to the completion of and production rate reductions on previously disclosed programs along with the timing of deliveries on certain programs.
Operational Highlights
In the fiscal second quarter, the company’s operating income was $18.8 million, down from $70.5 million in the year-ago quarter.
Interest expense and other during the quarter was $25.4 million, up from $17.9 million in the year-ago quarter.
Quarterly Segment Performance
Aerospace Structures: Segment sales were $249.3 million, down 22.2% from $320.3 million in the year-ago quarter. Operating income for the segment was $11.5 million, compared with $24.9 million in the year-ago quarter.
Integrated Systems: Segment sales dipped 4.7% year over year to $233.8 million. Operating income was $42.1 million, down from the year-ago level of $45.8 million.
Precision Components: Segment revenues declined 11.7% to $229.2 million in the reported quarter. However, the segment incurred an operating loss of $1.6 million as against an income of $12.1 million in the prior-year quarter.
Product Support: Segment sales dropped 20.3% year over year to $68.4 million in the quarter. Operating income was $11.2 million in the fiscal second quarter compared with the year-ago quarter’s $14.3 million.
Triumph Group, Inc. Price, Consensus and EPS Surprise
Triumph Group, Inc. Price, Consensus and EPS Surprise | Triumph Group, Inc. Quote
Financial Position
As of Sep 30, 2017, Triumph Group’s cash and cash equivalents were $33.7 million compared with $69.6 million as of Mar 31, 2017. As of Sep 30, 2017, long-term debt (excluding current portion) was $1.41 billion compared with $1.04 million as of Mar 31, 2017.
Cash outflow from operations during the reported quarter was $200 million compared with outflow of $47.2 million in the prior-year quarter. The company spent $10.7 million as capital expenditure in the quarter compared with $11.2 million in the prior-year quarter.
Guidance
The company reaffirmed net sales guidance of $3.1 to $3.2 billion and continues to expect organic sales growth in fiscal 2019. Management additionally maintained guidance for adjusted earnings per diluted share of $2.25-$2.75 and free cash use of $450-$500 million
Peer Releases
Orbital ATK, Inc. posted third-quarter 2017 adjusted earnings of $1.75 per share, beating the Zacks Consensus Estimate of $1.56 by 12.2%.
Raytheon Company reported third-quarter 2017 earnings from continuing operations of $1.97 per share, beating the Zacks Consensus Estimate of $1.90 by 3.7%.
Textron Inc. (TXT - Free Report) reported third-quarter 2017 adjusted earnings from continuing operations of 65 cents per share, beating the Zacks Consensus Estimate of 62 cents by 4.8%.
Zacks Rank
Triumph Group currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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