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Triumph (TGI) Misses on Q1 Earnings & Revenues, View Intact

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Triumph Group Inc.’s (TGI - Free Report) adjusted earnings from continuing operations in first-quarter fiscal 2018 (ended Jun 30) came in at 24 cents per share, missing the Zacks Consensus Estimate of 87 cents by 72.4%. Reported earnings also declined 76.9% from $1.04 per share a year ago.

Total Revenue

In the reported quarter, net sales were $781.7 million, missing the Zacks Consensus Estimate of $809 million by 3.3%. The top line also declined 12.5% year over year.

Organic sales in the quarter were down 6%, primarily due to deferred maintenance by some major customers of the company.

Operational Highlights

In the fiscal first quarter, the company’s operating income was $18.4 million, down from $46.7 million in the year-ago quarter.

Interest expense and other during the quarter was $21 million, up from $18.1 million in the year-ago quarter.

Quarterly Segment Performance

Aerospace Structures: Segment sales were $276 million, down 16.8% from $331.6 million in the year-ago quarter. Operating loss for the segment was $0.3 million, as against the income of $9.2 million in the year-ago quarter.

Integrated Systems: Segment sales dipped 7.5% year over year to $238.1 million. Operating income was $47.4 million, down from the year-ago level of $48 million.

Precision Components: Segment revenues declined 6.9% to $236.9 million in the reported quarter. However, the segment incurred an operating loss of $3.3 million compared with loss of $7.8 million in the prior-year quarter.

Product Support: Segment sales dropped 21.1% year over year to $66.4 million in the quarter. Operating income was $8.4 million in the fiscal first quarter against the year-ago quarter’s $14.1 million.

Triumph Group, Inc. Price, Consensus and EPS Surprise

Triumph Group, Inc. Price, Consensus and EPS Surprise | Triumph Group, Inc. Quote

Financial Position

As of Jun 30, 2017, Triumph’s cash and cash equivalents were $37 million compared with $69.6 million as of Mar 31, 2017. As of Jun 30, 2017, long-term debt (excluding current portion) was $1.14 billion compared with $1.04 million as of Mar 31, 2017.

Cash outflow from operations during the reported quarter was $99 million compared with outflow of $84 million in the year-ago quarter. The company spent $12.1 million as capital expenditure in the quarter compared with $12.7 million in the year-ago quarter.

Guidance

Based on anticipated aircraft production rates and divestitures completed in fiscal 2017, Triumph Group still expects revenues for fiscal 2018 to be in the range of $3.1–$3.2 billion. It also projects revenues to increase in fiscal 2019 as development programs enter into production and sales from new wins offset sunsetting programs.

The company projects fiscal 2018 adjusted earnings per diluted share to be in the band of $2.25 to $2.75.

Peer Releases

AAR Corp. (AIR - Free Report) reported fourth-quarter fiscal 2017 earnings of 44 cents per share, which surpassed the Zacks Consensus Estimate of 43 cents. Earnings were up 29.4% from the year-ago figure of 34 cents.

Lockheed Martin Corp. (LMT - Free Report) reported second-quarter 2017 earnings from continuing operations of $3.23 per share, beating the Zacks Consensus Estimate of $3.10 by 4.2%. Earnings also surpassed the year-ago period’s bottom-line figure by 10.2%.

Textron Inc. (TXT - Free Report) reported second-quarter 2017 adjusted earnings from continuing operations of 60 cents per share, beating the Zacks Consensus Estimate of 55 cents by 9.1%.

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

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