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Why Is Triumph Group (TGI) Down 18.6% Since Last Earnings Report?
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It has been about a month since the last earnings report for Triumph Group (TGI - Free Report) . Shares have lost about 18.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Triumph Group due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Triumph Group Q1 Earnings Beat Estimates, Sales Fall Y/Y
Triumph Group reported first-quarter fiscal 2022 (ended Jun 30, 2022) adjusted earnings of 12 cents per share, which surpassed the Zacks Consensus Estimate of 9 cents by 33.3%. The bottom line also surged 33.3% from 9 cents per share.
Including one-time adjustments, TGI incurred a GAAP loss of 16 cents per share in the fiscal first quarter compared with a loss of 47 cents per share in the prior-year quarter.
Total Sales
Triumph Group’s net sales in the quarter under review were $349.4 million, which beat the Zacks Consensus Estimate of $320 million by 9.2%. The top line, however, declined 11.9% from $396.6 million in the year-ago quarter.
Excluding divestitures and exited programs, organic sales in the quarter were up 1% year over year, primarily due to increases in commercial narrow-body production.
Operational Highlights
In the first quarter of fiscal 2022, Triumph Group generated an adjusted operating income of $32.6 million, which increased 4.2% from the year-ago reported figure. The adjusted operating margin of 9% expanded 100 basis points from 8% in the first quarter of fiscal 2021.
Interest expenses and others amounted to $31.9 million, down 17.4% from the prior-year quarter.
Triumph Group’s backlog was $1.53 billion, up 7.7% on a sequential basis from $1.42 billion.
Segmental Performance
Aerospace Structures: The segment’s sales totaled $94.8 million, down 31.5% from $138.3 million in the year-ago quarter. The segment reported an operating loss of $2.3 million for the first quarter of fiscal 2022.
Systems & Support: The segment’s sales declined 1.5% year over year to $254.6 million. The operating income was $33.2 in the first quarter of fiscal 2022.
Financial Position
As of Jun 30, 2022, TGI’s cash and cash equivalents totaled $134.6 million compared with $240.9 million as of Mar 31, 2022.
Its long-term debt (excluding the current portion) amounted to $1.59 billion as of Jun 30, 2022, flat with the long-term debt as of Mar 31, 2022.
Net cash used in operating activities as of Jun 30, 2022 was $93 million compared with the net cash outflow of $149.5 million in the same period last year.
Triumph Group’s capital expenditures were $3 million as of Jun 30, 2022 compared with $2.1 million in the prior year.
Guidance
Triumph Group provided its financial guidance for fiscal 2023. The company anticipates adjusted earnings per share (EPS) in the range of 28-48 cents. The Zacks Consensus Estimate for earnings is pegged at 55 cents per share, much higher than the guided range.
TGI expects net sales of $1.3 billion in fiscal 2023. The Zacks Consensus Estimate for revenues lies in line with the company’s guided range.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -160% due to these changes.
VGM Scores
At this time, Triumph Group has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Triumph Group has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Triumph Group (TGI) Down 18.6% Since Last Earnings Report?
It has been about a month since the last earnings report for Triumph Group (TGI - Free Report) . Shares have lost about 18.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Triumph Group due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Triumph Group Q1 Earnings Beat Estimates, Sales Fall Y/Y
Triumph Group reported first-quarter fiscal 2022 (ended Jun 30, 2022) adjusted earnings of 12 cents per share, which surpassed the Zacks Consensus Estimate of 9 cents by 33.3%. The bottom line also surged 33.3% from 9 cents per share.
Including one-time adjustments, TGI incurred a GAAP loss of 16 cents per share in the fiscal first quarter compared with a loss of 47 cents per share in the prior-year quarter.
Total Sales
Triumph Group’s net sales in the quarter under review were $349.4 million, which beat the Zacks Consensus Estimate of $320 million by 9.2%. The top line, however, declined 11.9% from $396.6 million in the year-ago quarter.
Excluding divestitures and exited programs, organic sales in the quarter were up 1% year over year, primarily due to increases in commercial narrow-body production.
Operational Highlights
In the first quarter of fiscal 2022, Triumph Group generated an adjusted operating income of $32.6 million, which increased 4.2% from the year-ago reported figure. The adjusted operating margin of 9% expanded 100 basis points from 8% in the first quarter of fiscal 2021.
Interest expenses and others amounted to $31.9 million, down 17.4% from the prior-year quarter.
Triumph Group’s backlog was $1.53 billion, up 7.7% on a sequential basis from $1.42 billion.
Segmental Performance
Aerospace Structures: The segment’s sales totaled $94.8 million, down 31.5% from $138.3 million in the year-ago quarter. The segment reported an operating loss of $2.3 million for the first quarter of fiscal 2022.
Systems & Support: The segment’s sales declined 1.5% year over year to $254.6 million. The operating income was $33.2 in the first quarter of fiscal 2022.
Financial Position
As of Jun 30, 2022, TGI’s cash and cash equivalents totaled $134.6 million compared with $240.9 million as of Mar 31, 2022.
Its long-term debt (excluding the current portion) amounted to $1.59 billion as of Jun 30, 2022, flat with the long-term debt as of Mar 31, 2022.
Net cash used in operating activities as of Jun 30, 2022 was $93 million compared with the net cash outflow of $149.5 million in the same period last year.
Triumph Group’s capital expenditures were $3 million as of Jun 30, 2022 compared with $2.1 million in the prior year.
Guidance
Triumph Group provided its financial guidance for fiscal 2023. The company anticipates adjusted earnings per share (EPS) in the range of 28-48 cents. The Zacks Consensus Estimate for earnings is pegged at 55 cents per share, much higher than the guided range.
TGI expects net sales of $1.3 billion in fiscal 2023. The Zacks Consensus Estimate for revenues lies in line with the company’s guided range.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -160% due to these changes.
VGM Scores
At this time, Triumph Group has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Triumph Group has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.