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Triumph Group (TGI) Q3 Earnings Top Estimates, Sales Fall Y/Y

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Triumph Group Inc.’s (TGI - Free Report) adjusted earnings in third-quarter fiscal 2021 (ended Dec 31, 2020) were 9 cents per share versus the Zacks Consensus Estimate of a loss of 7 cents. The bottom line however declined 87% from 69 cents recorded in the prior-year quarter.

Including one-time adjustments, the company incurred GAAP loss of $1.30 per share in the fiscal third quarter compared with loss of 26 cents incurred a year ago.

Total Sales

Net sales in the quarter under review came in at $426 million, missing the Zacks Consensus Estimate of $445 million by 4.2%. Moreover, the top line declined 39.5% on a year-over-year basis.

After taking divestitures into account, organic sales in the quarter went down 32% year over year because of planned reductions in sunsetting and transitioned programs, impact of the COVID-19 pandemic and resulting production rate decreases, primarily in commercial programs.

Operational Highlights

In third-quarter fiscal 2021, the company generated adjusted operating income of $37.1 million, which declined 40.5% from the year-ago quarter’s figure. Adjusted operating margin of 8.9% declined 20 basis points from 9.1% in the third quarter of fiscal 2020.

Interest expenses and other amounted to $44.9 million, up 35.2% from $33.2 million in the prior-year quarter.

Backlog came in at $2.28 billion, down year over year and on a sequential basis due to divestitures, sunsetting programs and production rate reductions.

Segmental Performance

Aerospace Structures: Segment sales totaled $162.4 million, down 56% from $369 million in the year-ago quarter. The segment reported operating income of $18 million during third-quarter fiscal 2021.

Systems & Support: Segment sales declined 22.1% year over year to $264.1 million. Operating income was $57.4 million during third-quarter fiscal 2021.

Triumph Group, Inc. Price, Consensus and EPS Surprise

 

Financial Position    

As of Dec 31, 2020, Triumph Group’s cash and cash equivalents totaled $477.3 million, compared with $485.5 million as of Mar 31, 2020.

Its long-term debt (excluding current portion) amounted to $2.13 billion as of Dec 31, 2020, compared with $1.80 billion as on Mar 31, 2020.

Net cash used in operating activities in the first nine months of fiscal 2021 was $195.9 million against net cash generated worth $39.3 million a year ago.

The company’s capital expenditures were $19 million in the first nine months of fiscal 2021 compared with $27.3 million in the prior-year quarter.

Guidance

Triumph Group reaffirmed its financial guidance for fiscal 2021. The company continues to expect net sales of $1.8-$1.9 billion. The Zacks Consensus Estimate for revenues of $1.85 billion lies at the mid-point of the guidance.

Zacks Rank

Triumph Group currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Defense Releases

Lockheed Martin Corp. (LMT - Free Report) reported fourth-quarter 2020 earnings from continuing operations of $6.38 per share, in line with the Zacks Consensus Estimate.

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