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Triumph Group (TGI) Gains on Better-Than-Expected Q2 Earnings
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Shares of Triumph Group Inc. (TGI - Free Report) rose 15.2% to reach $8.79 on Nov 9, reflecting investor optimism following the company's fiscal Q2 results.
The company’s second-quarter fiscal 2021 (ended Sep 30, 2020) adjusted loss was 8 cents per share, narrower than the Zacks Consensus Estimate of a loss of 19 cents. The bottom line however deteriorated from adjusted earnings of 63 cents recorded in the prior-year quarter.
Including one-time adjustments, the company incurred GAAP loss of 64 cents per share in the fiscal second quarter against earnings of 84 cents reported in the year-ago quarter.
Reduced sales and operating income in the fiscal second quarter resulted in the deterioration in the bottom-line figure.
Triumph Group, Inc. Price, Consensus and EPS Surprise
Net sales in the quarter under review came in at $481.8 million, outpacing the Zacks Consensus Estimate of $458 million by 5.2%. However, the top line slumped 37.6% on a year-over-year basis.
After taking divestitures into account, organic sales in the quarter went down 33% year over year due to planned reductions on sunsetting and transitioned programs, impacts of the COVID-19 pandemic, and resulting production rate decreases primarily on commercial programs.
Operational Highlights
In second-quarter fiscal 2021, the company generated adjusted operating income of $21.4 million, which declined 63.8% from the year-ago quarter’s figure. Adjusted operating margin of 4.4% contracted 330 basis points from 7.7% in the second quarter of fiscal 2020.
Interest expenses and other amounted to $52.5 million, up from $35.4 million in the prior-year quarter.
Backlog came in at $2.40 billion, down year over year on a sequential basis due to divestitures, sunsetting programs and recent production rate reductions.
Segmental Performance
Aerospace Structures: Segment sales totaled $254.2 million, down 45.9% from $422.6 million in the year-ago quarter. The segment incurred operating loss of $2.5 million, reflecting a significant deterioration from the year-ago period.
Systems & Support: Segment sales declined 28% year over year to $254.2 million. Operating income was $29.6 million, reflecting deterioration from the year-ago quarter’s operating income of $62.3 million.
Financial Position
As of Sep 30, 2020, Triumph Group’s cash and cash equivalents totaled $440.2 million compared with $485.4 million as of Mar 31, 2020.
Its long-term debt (excluding current portion) amounted to $2 billion as of Sep 30, 2020, compared with $1.80 billion as of Mar 31, 2020.
Net cash used in operating activities during the first two quarters of fiscal 2021 was $239.7 million compared with $10.6 million a year ago.
The company’s capital expenditures were $12.8 million during the first two quarters of fiscal 2021 compared with $17 million in the year-earlier quarter.
Guidance
Triumph Group reaffirmed financial guidance for fiscal 2021. The company continues to expect to generate net sales of $1.8-$1.9 billion. The Zacks Consensus Estimate for revenues of $1.84 billion lies below the mid-point of the guidance.
Lockheed Martin (LMT - Free Report) reported third-quarter 2020 earnings from continuing operations of $6.25 per share, which surpassed the Zacks Consensus Estimate of $6.07 by 3%.
Hexcel (HXL - Free Report) reported third-quarter 2020 loss of 29 cents per share against the Zacks Consensus Estimate of earnings of 7 cents. The bottom line also declined from the prior-year quarter’s earnings per share of 90 cents.
Teledyne (TDY - Free Report) reported third-quarter 2020 adjusted earnings of $2.48 per share, which surpassed the Zacks Consensus Estimate of $2.40 by 3.3%.
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Triumph Group (TGI) Gains on Better-Than-Expected Q2 Earnings
Shares of Triumph Group Inc. (TGI - Free Report) rose 15.2% to reach $8.79 on Nov 9, reflecting investor optimism following the company's fiscal Q2 results.
The company’s second-quarter fiscal 2021 (ended Sep 30, 2020) adjusted loss was 8 cents per share, narrower than the Zacks Consensus Estimate of a loss of 19 cents. The bottom line however deteriorated from adjusted earnings of 63 cents recorded in the prior-year quarter.
Including one-time adjustments, the company incurred GAAP loss of 64 cents per share in the fiscal second quarter against earnings of 84 cents reported in the year-ago quarter.
Reduced sales and operating income in the fiscal second quarter resulted in the deterioration in the bottom-line figure.
Triumph Group, Inc. Price, Consensus and EPS Surprise
Triumph Group, Inc. price-consensus-eps-surprise-chart | Triumph Group, Inc. Quote
Total Sales
Net sales in the quarter under review came in at $481.8 million, outpacing the Zacks Consensus Estimate of $458 million by 5.2%. However, the top line slumped 37.6% on a year-over-year basis.
After taking divestitures into account, organic sales in the quarter went down 33% year over year due to planned reductions on sunsetting and transitioned programs, impacts of the COVID-19 pandemic, and resulting production rate decreases primarily on commercial programs.
Operational Highlights
In second-quarter fiscal 2021, the company generated adjusted operating income of $21.4 million, which declined 63.8% from the year-ago quarter’s figure. Adjusted operating margin of 4.4% contracted 330 basis points from 7.7% in the second quarter of fiscal 2020.
Interest expenses and other amounted to $52.5 million, up from $35.4 million in the prior-year quarter.
Backlog came in at $2.40 billion, down year over year on a sequential basis due to divestitures, sunsetting programs and recent production rate reductions.
Segmental Performance
Aerospace Structures: Segment sales totaled $254.2 million, down 45.9% from $422.6 million in the year-ago quarter. The segment incurred operating loss of $2.5 million, reflecting a significant deterioration from the year-ago period.
Systems & Support: Segment sales declined 28% year over year to $254.2 million. Operating income was $29.6 million, reflecting deterioration from the year-ago quarter’s operating income of $62.3 million.
Financial Position
As of Sep 30, 2020, Triumph Group’s cash and cash equivalents totaled $440.2 million compared with $485.4 million as of Mar 31, 2020.
Its long-term debt (excluding current portion) amounted to $2 billion as of Sep 30, 2020, compared with $1.80 billion as of Mar 31, 2020.
Net cash used in operating activities during the first two quarters of fiscal 2021 was $239.7 million compared with $10.6 million a year ago.
The company’s capital expenditures were $12.8 million during the first two quarters of fiscal 2021 compared with $17 million in the year-earlier quarter.
Guidance
Triumph Group reaffirmed financial guidance for fiscal 2021. The company continues to expect to generate net sales of $1.8-$1.9 billion. The Zacks Consensus Estimate for revenues of $1.84 billion lies below the mid-point of the guidance.
Zacks Rank
Triumph Group currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some Q3 Defense Releases
Lockheed Martin (LMT - Free Report) reported third-quarter 2020 earnings from continuing operations of $6.25 per share, which surpassed the Zacks Consensus Estimate of $6.07 by 3%.
Hexcel (HXL - Free Report) reported third-quarter 2020 loss of 29 cents per share against the Zacks Consensus Estimate of earnings of 7 cents. The bottom line also declined from the prior-year quarter’s earnings per share of 90 cents.
Teledyne (TDY - Free Report) reported third-quarter 2020 adjusted earnings of $2.48 per share, which surpassed the Zacks Consensus Estimate of $2.40 by 3.3%.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>