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Triumph Group Inc. (TGI - Analyst Report) reported strong results for the third quarter of fiscal 2013 (ended Dec 31, 2012).

Earnings per share from continuing operations, excluding $0.3 million of pre-tax integration costs and a $2.0 million pre-tax charge (or $0.02 per share) related to early retirement incentives to certain employees, increased 13.2% year over year to $1.46 in the reported quarter. Results surpassed the Zacks Consensus Estimate of $1.38 per share by 5.8%.

However, including the above mentioned pre-tax charges, income from continuing operations was recorded at $75.2 million, or $1.43 per share.

Revenue: In the reported quarter, net sales inched up 7.8% year over year to $890.6 million, most of which is derived from organic growth. However, revenue missed the Zacks Consensus Estimate of $896.0 million.

Segment wise, sales from Aerostructures surged to $676.8 million from $626.0 million in the prior-year comparable quarter. Aerospace Systems revenue grew 5.9% year over year to $141.1 million, while Aftermarket Services increased to $74.6 million from $68.6 million in the year-ago quarter.

Margins: Operating income in the third quarter escalated 14.2% to $134.4 million compared with $117.6 million in the year-ago quarter. Operating margin increased to 15.1% in the reported quarter from 14.2% in the third quarter of 2012.

On a segmental basis, Aerostructures reported a rise of 13.0% in operating income, to settle at $117.5 million. Aerospace Systems’ operating income grew 10.4% to $20.6 million. Also, Aftermarket Services displayed a tremendous rise of 42.5% to settle at $9.9 million.

Balance Sheet: Exiting the third quarter, Triumph’s cash and cash equivalents were approximately $33.5 million compared with $30.7 million at the end of the previous quarter. Long-term debt (net of current portion) was up 7.6% to $1.04 billion from $967.5 million in the previous quarter.

Cash Flow: Cash provided by operations, before pension contributions, was recorded at $97.7 million in the third quarter 2013; up from $82.7 million in the year-ago period. Capital expenditures in the reported quarter climbed to $28.5 million from $24.8 million in the year-ago quarter.

Outlook: Management anticipates higher revenue across segments, operating income growth and margin expansion in the fourth quarter 2013. Moreover, additions of assets of Embee Corporation and Goodrich Pump and Engine Control Systems will contribute significantly to the earnings of the company.

Based on the above positives, the company expects the revenue to be $3.65 billion for fiscal 2013. Further, management raised its full-year earnings guidance to approximately $6.05 per diluted share from continuing operations, excluding integration costs and early retirement incentives. Initially, earnings per share were projected to be approximately $5.95, excluding integration costs.

The stock currently bears a Zacks Rank #1 (Strong Buy). Other stocks worth a look in the industry are Alliant Techsystems Inc. (ATK - Analyst Report) and Esterline Technologies Corp. (ESL - Snapshot Report); both holding a Zacks Rank #1 (Strong Buy) as well. Whereas another stock, CAE Inc. (CAE - Snapshot Report), holds a Zacks Rank #2 (Buy).

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