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Triumph Group (TGI) Down 14.3% Since Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Triumph Group, Inc. (TGI - Free Report) . Shares have lost about 14.3% 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.
Triumph Group’s adjusted earnings from continuing operations in fourth-quarter fiscal 2017 (ended Mar 31, 2017) came in at $3.09 per share, beating the Zacks Consensus Estimate of $1.60 by 93.1%. Reported earnings also improved a massive 134.1% from $1.32 per share a year ago.
In fiscal 2017, the company’s adjusted earnings per share came in at $6.54, which exceeded the Zacks Consensus Estimate of $4.66 by 40.3%. The full year bottom-line figure also increased 21.8% from $5.37 per share a year ago.
Total Revenue
In the reported quarter, net sales were $919.9 million, beating the Zacks Consensus Estimate of $916 million by 0.5%. The top line, however, declined 13% year over year.
In fiscal 2017, the company's revenues came in at $3.53 billion, missing the Zacks Consensus Estimate of $3.54 billion by a whisker.
Organic sales in the quarter were down 13% primarily due to rate reductions on key Aerospace structures programs, changes in model mix, reduced volume in military end market and foreign exchange rates.
Operational Highlights
In fourth-quarter fiscal 2017, the company’s operating loss was $115.5 million, narrower than the loss of $1.18 billion in the year-ago quarter.
Quarterly Segment Performance
Aerospace Structures: Segment sales were $338.8 million, down 20% from $423.6 million in the year-ago quarter. Operating loss for the segment was $166.7 million, narrower than the loss of $1.22 billion in the year-ago quarter.
Integrated Systems: Segment sales were down 6.8% year over year to $282 million. Operating income was $55.9 million, down from the year-ago level of $66.7 million.
Precision Components: Segment revenues declined 11.7% to $247.6 million in the reported quarter. However, the segment reported an operating income of $11.1 million compared with $1.3 million in the prior-year quarter.
Product Support: Segment sales dropped 4.4% year over year to $81 million in the reported quarter. Operating income was $12.8 million in the fiscal fourth quarter against the year-ago quarter’s loss of $6.5 million.
Financial Position
As of Mar 31, 2017, Triumph’s cash and cash equivalents were $69.6 million compared with $20.9 million as of Mar 31, 2016. As of Mar 31, 2017, long-term debt (excluding current portion) was $1.04 billion compared with $1.37 million as of Mar 31, 2016.
Cash flow from operations during the quarter was $454 million. The company spent $18.7 million as capital expenditure in the quarter.
Guidance
Based on anticipated aircraft production rates and divestitures completed in fiscal 2017, Triumph Group projects revenues for fiscal 2018 in the range of $3.1–$3.2 billion. It also expects revenues to increase in fiscal 2019 as development programs enter into production and sales from new wins offset sunsetting programs.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter. In the past month, the consensus estimate has shifted lower by 19.6% due to these changes.
At this time, Triumph's stock has a great Growth Score of 'A', though it is lagging a lot on the momentum front with a 'D'. The stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. It's no surprise that the stock has a Zacks Rank #4 (Sell). We expect below average returns from the stock in the next few months.
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Triumph Group (TGI) Down 14.3% Since Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Triumph Group, Inc. (TGI - Free Report) . Shares have lost about 14.3% 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.
Triumph Tops Q4 Earnings & Revenues, Gives FY18 View
Triumph Group’s adjusted earnings from continuing operations in fourth-quarter fiscal 2017 (ended Mar 31, 2017) came in at $3.09 per share, beating the Zacks Consensus Estimate of $1.60 by 93.1%. Reported earnings also improved a massive 134.1% from $1.32 per share a year ago.
In fiscal 2017, the company’s adjusted earnings per share came in at $6.54, which exceeded the Zacks Consensus Estimate of $4.66 by 40.3%. The full year bottom-line figure also increased 21.8% from $5.37 per share a year ago.
Total Revenue
In the reported quarter, net sales were $919.9 million, beating the Zacks Consensus Estimate of $916 million by 0.5%. The top line, however, declined 13% year over year.
In fiscal 2017, the company's revenues came in at $3.53 billion, missing the Zacks Consensus Estimate of $3.54 billion by a whisker.
Organic sales in the quarter were down 13% primarily due to rate reductions on key Aerospace structures programs, changes in model mix, reduced volume in military end market and foreign exchange rates.
Operational Highlights
In fourth-quarter fiscal 2017, the company’s operating loss was $115.5 million, narrower than the loss of $1.18 billion in the year-ago quarter.
Quarterly Segment Performance
Aerospace Structures: Segment sales were $338.8 million, down 20% from $423.6 million in the year-ago quarter. Operating loss for the segment was $166.7 million, narrower than the loss of $1.22 billion in the year-ago quarter.
Integrated Systems: Segment sales were down 6.8% year over year to $282 million. Operating income was $55.9 million, down from the year-ago level of $66.7 million.
Precision Components: Segment revenues declined 11.7% to $247.6 million in the reported quarter. However, the segment reported an operating income of $11.1 million compared with $1.3 million in the prior-year quarter.
Product Support: Segment sales dropped 4.4% year over year to $81 million in the reported quarter. Operating income was $12.8 million in the fiscal fourth quarter against the year-ago quarter’s loss of $6.5 million.
Financial Position
As of Mar 31, 2017, Triumph’s cash and cash equivalents were $69.6 million compared with $20.9 million as of Mar 31, 2016. As of Mar 31, 2017, long-term debt (excluding current portion) was $1.04 billion compared with $1.37 million as of Mar 31, 2016.
Cash flow from operations during the quarter was $454 million. The company spent $18.7 million as capital expenditure in the quarter.
Guidance
Based on anticipated aircraft production rates and divestitures completed in fiscal 2017, Triumph Group projects revenues for fiscal 2018 in the range of $3.1–$3.2 billion. It also expects revenues to increase in fiscal 2019 as development programs enter into production and sales from new wins offset sunsetting programs.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter. In the past month, the consensus estimate has shifted lower by 19.6% due to these changes.
Triumph Group, Inc. Price and Consensus
Triumph Group, Inc. Price and Consensus | Triumph Group, Inc. Quote
VGM Scores
At this time, Triumph's stock has a great Growth Score of 'A', though it is lagging a lot on the momentum front with a 'D'. The stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. It's no surprise that the stock has a Zacks Rank #4 (Sell). We expect below average returns from the stock in the next few months.