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Why Is TriMas (TRS) Down 6.5% Since the Last Earnings Report?
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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 6.5% 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 posted adjusted earnings of 39 cents per share in third-quarter 2017, up 11.4% from 35 cents reported in the prior-year period. Earnings came in line with the Zacks Consensus Estimate.
On a reported basis, including special items, TriMas’ earnings surged 52.6% year over year to 29 cents per share.
TriMas generated revenues of $209.3 million for the quarter, outpacing the Zacks Consensus Estimate of $208.8 million. Revenues also went up 3.5% year over year.
Cost and Margins
Cost of sales rose 4.3% to $150.5 million in the quarter from $144 million in the year-ago quarter. Gross profit inched up 1.3% year over year to $58.8 million. Gross margin contracted 60 basis points (bps) to 28%.
Selling, general and administrative expenses plunged 23.7% year over year to $30.7 million. Adjusted operating profit improved 2.3% to $28.8 million from the prior-year quarter. Adjusted operating margin declined 20 bps year over year to 13.7% in the quarter.
Segment Performance
Packaging: Net sales edged down 0.9% year over year to $89.6 million. An increase in food and beverage product sales was more than offset by lower sales of beauty and home care, and industrial products in North America. Adjusted operating profit climbed 6.2% to $23.1 million.
Aerospace: Net sales increased 2.4% to $48.6 million from $47.4 million recorded in the year-earlier quarter, driven primarily by continued improved production throughput and deliveries, and solid order demand. The segment reported adjusted operating profit of $7.8 million compared to $7.9 million in the prior-year quarter.
Energy: Net sales jumped 5.8% year over year to $40.4 million, benefiting from elevated demand as a result of improved delivery performance and responding to customers' immediate needs following Hurricane Harvey. The segment reported adjusted operating profit of $1.7 million compared with $1.8 million recorded in the year-ago quarter.
Engineered Components: The segment reported revenues of $30.8 million, a 17% improvement from $31.2 million in the prior-year quarter, primarily owing to higher sales of small and mid-sized acetylene cylinders, as well as oil field-related products due to increased oil and gas well completions in the United States and Canada. Adjusted operating profit dropped 2.9% year over year to $3.3 million.
Financial Performance
TriMas had cash and cash equivalents of $24.8 million as of Sep 30, 2017, compared with $20.7 million reported at the end of 2016. The company recorded cash from operations of $72.7 million for the nine-month period ended Sep 30, 2017, compared with $46.4 million recorded in the prior-year period. As of quarter end, TriMas’ net debt was $336.6 million, down from $374.6 million as of Dec 31, 2016.
Guidance
TriMas will continue to focus on leveraging the TriMas Business Model to drive performance improvements which will result in long-term growth. The company is working diligently to mitigate near-term matters impacting its businesses and remain focused on achieving 2017 operating plan. TriMas updated its full-year earnings per share outlook to the range of $1.37-$1.43 from the prior band of $1.35-$1.45 per share. It continues to estimate that 2017 sales will increase 2-4% compared to 2016.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last month as none of them issued any earnings estimate revisions.
Currently, TriMas' stock has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the middle 20% 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 equally suitable for growth, value and momentum investors.
Outlook
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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Why Is TriMas (TRS) Down 6.5% Since the Last Earnings Report?
It has been about a month since the last earnings report for TriMas Corporation (TRS - Free Report) . Shares have lost about 6.5% 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 Meets Q3 Earnings, Beats Sales, Updates View
TriMas posted adjusted earnings of 39 cents per share in third-quarter 2017, up 11.4% from 35 cents reported in the prior-year period. Earnings came in line with the Zacks Consensus Estimate.
On a reported basis, including special items, TriMas’ earnings surged 52.6% year over year to 29 cents per share.
TriMas generated revenues of $209.3 million for the quarter, outpacing the Zacks Consensus Estimate of $208.8 million. Revenues also went up 3.5% year over year.
Cost and Margins
Cost of sales rose 4.3% to $150.5 million in the quarter from $144 million in the year-ago quarter. Gross profit inched up 1.3% year over year to $58.8 million. Gross margin contracted 60 basis points (bps) to 28%.
Selling, general and administrative expenses plunged 23.7% year over year to $30.7 million. Adjusted operating profit improved 2.3% to $28.8 million from the prior-year quarter. Adjusted operating margin declined 20 bps year over year to 13.7% in the quarter.
Segment Performance
Packaging: Net sales edged down 0.9% year over year to $89.6 million. An increase in food and beverage product sales was more than offset by lower sales of beauty and home care, and industrial products in North America. Adjusted operating profit climbed 6.2% to $23.1 million.
Aerospace: Net sales increased 2.4% to $48.6 million from $47.4 million recorded in the year-earlier quarter, driven primarily by continued improved production throughput and deliveries, and solid order demand. The segment reported adjusted operating profit of $7.8 million compared to $7.9 million in the prior-year quarter.
Energy: Net sales jumped 5.8% year over year to $40.4 million, benefiting from elevated demand as a result of improved delivery performance and responding to customers' immediate needs following Hurricane Harvey. The segment reported adjusted operating profit of $1.7 million compared with $1.8 million recorded in the year-ago quarter.
Engineered Components: The segment reported revenues of $30.8 million, a 17% improvement from $31.2 million in the prior-year quarter, primarily owing to higher sales of small and mid-sized acetylene cylinders, as well as oil field-related products due to increased oil and gas well completions in the United States and Canada. Adjusted operating profit dropped 2.9% year over year to $3.3 million.
Financial Performance
TriMas had cash and cash equivalents of $24.8 million as of Sep 30, 2017, compared with $20.7 million reported at the end of 2016. The company recorded cash from operations of $72.7 million for the nine-month period ended Sep 30, 2017, compared with $46.4 million recorded in the prior-year period. As of quarter end, TriMas’ net debt was $336.6 million, down from $374.6 million as of Dec 31, 2016.
Guidance
TriMas will continue to focus on leveraging the TriMas Business Model to drive performance improvements which will result in long-term growth. The company is working diligently to mitigate near-term matters impacting its businesses and remain focused on achieving 2017 operating plan. TriMas updated its full-year earnings per share outlook to the range of $1.37-$1.43 from the prior band of $1.35-$1.45 per share. It continues to estimate that 2017 sales will increase 2-4% compared to 2016.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last month as none of them issued any earnings estimate revisions.
TriMas Corporation Price and Consensus
TriMas Corporation Price and Consensus | TriMas Corporation Quote
VGM Scores
Currently, TriMas' stock has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the middle 20% 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 equally suitable for growth, value and momentum investors.
Outlook
The stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.