Based in Wayne, Pennsylvania, Triumph Group, Inc. (TGI - Analyst Report) recently issued a public offering of 4,666,116 shares of its common stock. The company is likely to close and settle the offering on June 12, 2012.
The Carlyle Group’s investment funds and units will be selling all their interest in Triumph Group via this public offering. Sole underwriter to this offering is Credit Suisse Securities (USA) LLC.
Of late, the company reported encouraging results for the fourth quarter and fiscal 2012 with $1.57 per diluted share, up from $1.07 in the year-ago quarter and a 3% y/y rise in net sales. The improved results were driven by significant operating income growth and operating margin expansion generated in the company’s Aerospace Systems segment as well as Aerostructures segment with organic growth reaching 3%.
Triumph Group bears a favorable outlook for fiscal 2013, expecting to boost current production rates and anticipating earnings per share from continuing operations to be within the range of $5.45 to $5.55, excluding integration costs. Moreover, strong backlog during the fourth quarter of 2012 coupled with a solid balance sheet looks impressive for the company’s upcoming financial year.
The improving air transport industry indicates a promising demand scenario for the company’s products, equipment and methods of repair and overhaul services; thereby improving its results going forward. However, it faces stiff competition from its peers, such as Hexcel Corp. (HXL - Snapshot Report), Rolls Royce Holdings plc (RYCEY) and AAR Corp. (AIR - Analyst Report).
We currently maintain a long-term ‘Neutral’ recommendation on the stock. Triumph Group holds a Zacks #2 Rank, which translates into a short-term ‘Buy’ rating (1-3 months).