Earnings Preview: Triumph Group Inc.

Triumph Group Inc. (TGI - Analyst Report) will report its second-quarter 2012 earnings on Monday, October 31, 2011, after the market closes.

The current Zacks Consensus Estimate for earnings per share (EPS) is $1.04, representing an annualized growth of 22.25%.  

With respect to earnings surprises over the trailing four quarters, TGI outperformed the Zacks Consensus Estimate in three quarters and was in line in one; leading to an average earnings surprise of 11.60%. The average earnings surprise implies that the company outperformed the Zacks Consensus Estimate by the same magnitude over the last four quarters.

First Quarter 2012 Highlights

On July 28, 2011, Triumph Group reported encouraging results for the first quarter of fiscal 2012. Excluding the Vought acquisition expense, first-quarter earnings per diluted share came in at $1.00, showing an improvement from 66 cents in the year-ago comparable quarter. Results also surpassed the Zacks Consensus Estimate of 85 cents.

The improvement was attributable to increased year-over-year revenue growth, supported by operating income and margin expansion across all business segments. Significant cash flow generated during the quarter as well as strong balance sheet and backlog fuelled the growth.

In the first quarter of 2012, net sales shot up 108% year over year to $845.1 million, with organic growth reaching roughly 13%.

Agreement of Estimate Revisions   

In the last 30 days, one analyst increased the company’s EPS estimate, while one analyst decreased the estimate for the second quarter. One analyst each decreased their estimates for fiscal 2012 and 2013.

Magnitude of Estimate Revisions   

Estimates over the last 30 days remained intact at $1.04 per share for the second quarter of 2012, representing a year-over-year growth of 22.25%.

Estimate for fiscal 2012 remained same at $4.39 over the last 30 days while that for fiscal 2013 decreased marginally from $4.98 to $4.97. These estimates represented a year-over-year growth of 29.42% for 2012 and 13.24% for 2013.

Our Take   

Triumph Group is likely to post impressive results in the second quarter of 2012 based on the company’s continued focus on execution and cost control programs. Moreover, the improving air transport industry indicates a promising demand scenario, for the company’s products, equipments and methods of repair and overhaul services; thereby improving results.

Based in Wayne, Pennsylvania, Triumph Group offers a variety of products and services to the aerospace industry. The company serves commercial and regional airlines, air cargo carriers, as well as OEMs of commercial, regional, business and military aircrafts. It faces stiff competition from its peers, such as AAR Corp. (AIR - Analyst Report) and Goodrich Corp. (GR - Analyst Report).                      

We currently maintain a long-term Neutral recommendation on the stock. Triumph Group has a Zacks # 4 Rank, which translates into a short-term Sell rating (1-3 months).

Read the full analyst report on GR

Read the full analyst report on TGI

Read the full analyst report on AIR