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TriMas (TRS) Down 6.6% Since Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for TriMas Corporation (TRS - Free Report) . Shares have lost about 6.6% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
TriMas Q1 Earnings Beat Estimates, Revenues In Line
TriMas posted adjusted earnings of $0.30 per share for first-quarter 2017, beating the Zacks Consensus Estimate of $0.28. Earnings also improved 11% year over year.
On a reported basis, including special items, TriMas’ reported earnings of $0.15 per share in the reported quarter compared to $0.18 in the prior-year quarter.
TriMas posted revenues of $200 million for the first quarter, in line with the Zacks Consensus Estimate. Revenues edged down 1.5% year over year, as organic growth in the Aerospace and Packaging was more than offset by prolonged weakness in the oil and gas, and general industrial end markets, and foreign currency exchange.
Cost and Margins
Cost of sales inched up 0.8% to $148 million in the quarter from $147 million in the year-ago quarter. Gross profit fell 7.4% year over year to $51.8 million. Gross margin contracted 160 basis points (bps) to 26%.
Selling, general and administrative expenses descended 8.7% year over year to $36 million. Adjusted operating profit dipped 9.2% to $23.9 million from the prior-year quarter. Adjusted operating margin expanded 120 basis points year over year to 12% in the quarter.
Segment Performance
Packaging: Net sales advanced 1.1% year over year to $81 million, driven by sales increases in all the three end markets, more than offsetting the impact of unfavorable currency exchange. Adjusted operating profit climbed 1.1% to $18.5 million as the impact of higher sales levels was offset by continued investment in growth and global capabilities, and unfavorable currency exchange.
Aerospace: Net sales increased 12% to $45.4 million from $40.5 million in the year-earlier quarter as a result of improved production throughput and strong order demand. The segment reported adjusted operating profit of $5 million, a 41.6% rise from $3.5 million in the comparable quarter last year.
Energy: Net sales declined 8.5% year over year to $40.9 million, chiefly due to persistently lower demand levels from the oil and gas customers and the impact of de-emphasizing less profitable regions. The segment reported adjusted operating profit of $2.5 million compared to $1.1 million in the year-ago quarter primarily as a result of extensive realignment efforts and manufacturing productivity improvements.
Engineered Components: The segment reported revenues of $32.5 million, declining 13.3% from $37.5 million in the prior-year quarter, due to lower sales of high-pressure cylinders as a result of sustained softness in general industrial end markets and the impact of customer consolidations. Sales of oil field-related products also decreased as a result of lower levels of oil and natural gas well completions. Adjusted operating profit descended 13% to $5 million due to reduced sales levels and lower fixed cost absorption.
Financial Performance
TriMas had cash and cash equivalents of $22.6 million as of Mar 31, 2017, compared with $20.7 million at the end of 2016. The company recorded cash from operations of $30 million in the reported quarter compared with cash usage of $3.3 million recorded in the year-ago quarter.
In first-quarter 2017, the company recorded adjusted free cash flow of $17.7 million compared to use of $5.9 million in first-quarter 2016, driven primarily by enhanced focus on net working capital management. As of quarter end, TriMas’ total debt was $366.9 million, compared to $374.7 million as of December 31, 2016, and $437.9 million as of March 31, 2016.
Guidance
TriMas reaffirmed its full-year 2017 earnings per share range of $1.35–$1.45, excluding any current or future events that may be considered special items.
The company will remain focused on its performance improvement plans in the Energy and Aerospace segments. In addition, innovation in its Packaging and Engineered Components segments will drive growth.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been two revisions higher for the current quarter compared to four lower.
At this time, TriMas' stock has a nice Growth Score of 'B', though it is lagging a bit on the momentum front with a 'C'. The stock was allocated a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for growth and value investors than momentum investors.
Outlook
While estimates have been broadly trending downward for the stock, the magnitude of these revisions is net zero. Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.
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TriMas (TRS) Down 6.6% Since Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for TriMas Corporation (TRS - Free Report) . Shares have lost about 6.6% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
TriMas Q1 Earnings Beat Estimates, Revenues In Line
TriMas posted adjusted earnings of $0.30 per share for first-quarter 2017, beating the Zacks Consensus Estimate of $0.28. Earnings also improved 11% year over year.
On a reported basis, including special items, TriMas’ reported earnings of $0.15 per share in the reported quarter compared to $0.18 in the prior-year quarter.
TriMas posted revenues of $200 million for the first quarter, in line with the Zacks Consensus Estimate. Revenues edged down 1.5% year over year, as organic growth in the Aerospace and Packaging was more than offset by prolonged weakness in the oil and gas, and general industrial end markets, and foreign currency exchange.
Cost and Margins
Cost of sales inched up 0.8% to $148 million in the quarter from $147 million in the year-ago quarter. Gross profit fell 7.4% year over year to $51.8 million. Gross margin contracted 160 basis points (bps) to 26%.
Selling, general and administrative expenses descended 8.7% year over year to $36 million. Adjusted operating profit dipped 9.2% to $23.9 million from the prior-year quarter. Adjusted operating margin expanded 120 basis points year over year to 12% in the quarter.
Segment Performance
Packaging: Net sales advanced 1.1% year over year to $81 million, driven by sales increases in all the three end markets, more than offsetting the impact of unfavorable currency exchange. Adjusted operating profit climbed 1.1% to $18.5 million as the impact of higher sales levels was offset by continued investment in growth and global capabilities, and unfavorable currency exchange.
Aerospace: Net sales increased 12% to $45.4 million from $40.5 million in the year-earlier quarter as a result of improved production throughput and strong order demand. The segment reported adjusted operating profit of $5 million, a 41.6% rise from $3.5 million in the comparable quarter last year.
Energy: Net sales declined 8.5% year over year to $40.9 million, chiefly due to persistently lower demand levels from the oil and gas customers and the impact of de-emphasizing less profitable regions. The segment reported adjusted operating profit of $2.5 million compared to $1.1 million in the year-ago quarter primarily as a result of extensive realignment efforts and manufacturing productivity improvements.
Engineered Components: The segment reported revenues of $32.5 million, declining 13.3% from $37.5 million in the prior-year quarter, due to lower sales of high-pressure cylinders as a result of sustained softness in general industrial end markets and the impact of customer consolidations. Sales of oil field-related products also decreased as a result of lower levels of oil and natural gas well completions. Adjusted operating profit descended 13% to $5 million due to reduced sales levels and lower fixed cost absorption.
Financial Performance
TriMas had cash and cash equivalents of $22.6 million as of Mar 31, 2017, compared with $20.7 million at the end of 2016. The company recorded cash from operations of $30 million in the reported quarter compared with cash usage of $3.3 million recorded in the year-ago quarter.
In first-quarter 2017, the company recorded adjusted free cash flow of $17.7 million compared to use of $5.9 million in first-quarter 2016, driven primarily by enhanced focus on net working capital management. As of quarter end, TriMas’ total debt was $366.9 million, compared to $374.7 million as of December 31, 2016, and $437.9 million as of March 31, 2016.
Guidance
TriMas reaffirmed its full-year 2017 earnings per share range of $1.35–$1.45, excluding any current or future events that may be considered special items.
The company will remain focused on its performance improvement plans in the Energy and Aerospace segments. In addition, innovation in its Packaging and Engineered Components segments will drive growth.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been two revisions higher for the current quarter compared to four lower.
TriMas Corporation Price and Consensus
TriMas Corporation Price and Consensus | TriMas Corporation Quote
VGM Scores
At this time, TriMas' stock has a nice Growth Score of 'B', though it is lagging a bit on the momentum front with a 'C'. The stock was allocated a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for growth and value investors than momentum investors.
Outlook
While estimates have been broadly trending downward for the stock, the magnitude of these revisions is net zero. Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.