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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

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.


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%.

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