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TriMas (TRS) Q2 Earnings & Sales Top Estimates, View Up

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TriMas Corporation (TRS - Free Report) delivered adjusted earnings of 48 cents per share in second-quarter 2018, up 20% from 40 cents reported in the prior-year period. Earnings beat the Zacks Consensus Estimate of 46 cents. The company benefited from its focus on commercial efforts, improved market conditions and realignment actions.
 
On a reported basis, TriMas reported earnings per share of 42 cents compared with 32 cents in second-quarter 2017.
 
TriMas generated revenues of $225 million in the second quarter, outpacing the Zacks Consensus Estimate of $220 million. The top-line figure also improved 5% year over year.

TriMas Corporation Price, Consensus and EPS Surprise

 

TriMas Corporation Price, Consensus and EPS Surprise | TriMas Corporation Quote

Cost and Margins
 
Cost of sales rose 4% year over year to $160 million in the second quarter. Gross profit increased 9% year over year to $64.8 million. Gross margin expanded 90 basis points (bps) to 28.8%.
 
Selling, general and administrative expenses inched up 0.6% year over year to $33.3 million. Adjusted operating profit improved 5% to $32 million from the prior-year quarter. Adjusted operating margin remained flat year over year at 14.3% in the quarter.
 
Segment Performance

 
Packaging:
Net sales increased 7% year over year to $95.1 million as a result of higher sales of health, beauty and home care, and industrial products, related to product introductions, continued growth in Asia, elevated demand and favorable currency exchange. Adjusted operating profit climbed 5.7% year over year to $22.8 million.
 
Aerospace:
Net sales decreased 4% year over year to $45.6 million from $47.6 million recorded in the year-earlier quarter, as a result of the impact of TriMas’ decision to exit less profitable components and the benefit realized in second-quarter 2017 from reductions against past due orders. The segment reported adjusted operating profit of $7.3 million, up 4.6% year over year as benefits from continued improved production efficiencies and a more favorable product sales mix offset the impact of lower sales levels.
 
Specialty Products: The segment reported revenues of $84 million, a 9% improvement from $77 million recorded in the prior-year quarter, primarily driven by higher sales levels of cylinders and oil and gas related products due to refocused commercial efforts and increased end-market demand. Adjusted operating profit climbed 7% year over year to $9.8 million on higher sales levels and continued realignment actions.
 
Financial Performance
 
TriMas reported cash and cash equivalents of $53.4 million as of Jun 30, 2018, considerably up from $27.6 million as of Dec 31, 2017. The company generated $51.6 million of cash from operating activities during the six-month period ended Jun 30, 2018, compared with $49.6 million reported in the comparable period last year. At the end of the reported quarter, net debt was approximately $240 million, down from $276 million as of Dec 31, 2017.
 
Guidance
 
TriMas raised its full-year 2018 organic sales growth estimate to around 5% year over year from the previous guidance of around 3%. It also lifted its earnings per share guidance to $1.65-$1.75 from the previous projection of $1.60-$1.75. Mid-point of the guidance reflects year-over-year increase of approximately 21%. Free cash flow in 2018 is expected to be greater than 120% of net income.

During the remainder of 2018, TriMas will continue to aggressively manage the effects of increased commodity costs, as well as the impact of tariffs, through commercial actions, supply-chain management, leveraging global manufacturing footprint, and continued management of its businesses under the TriMas Business Model.

Share Price Performance

Over the past year, TriMas has outperformed the industry with respect to price performance. The stock has gained around 24%, while the industry recorded loss of 6.5%.



Zacks Rank & Key Picks

TriMas currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the same sector include Caterpillar Inc. (CAT - Free Report) , Chart Industries, Inc. (GTLS - Free Report) and W.W. Grainger, Inc. (GWW - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Caterpillar has a long-term earnings growth rate of 13.3%. The stock has gained around 22% in a year’s time.

Chart Industries has a long-term earnings growth rate of 26.9%. The company’s shares have appreciated 126% over the past year.

Grainger has a long-term earnings growth rate of 12.5%. Its shares have rallied nearly 106% in the past year.

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