Triumph Group Inc.’s (TGI - Free Report) adjusted earnings in third-quarter fiscal 2020 (ended Dec 31, 2019) were 69 cents per share, which surpassed the Zacks Consensus Estimate of 66 cents by 4.5%. The bottom line also improved 64.3% from 42 cents recorded in the prior-year quarter.
Including one-time adjustments, the company incurred GAAP loss of 27 cents per share in the fiscal third quarter compared with loss of 62 cents incurred in the year-ago quarter.
Improved operating income generated by the Aerospace Structures segment primarily contributed to the year-over-year improvement in the bottom- line figure.
Net sales in the quarter under review came in at $704.7 million, outpacing the Zacks Consensus Estimate of $675 million by 4.4%. However, the top line declined 12.8% on a year-over-year basis.
After taking divestitures into account, organic sales in the quarter went up 8% year over year driven by increased volumes on Airbus commercial programs, military rotorcraft components, aftermarket accessory services and legacy structures programs.
In third-quarter fiscal 2020, the company generated adjusted operating income of $64 million, which improved 70.3% from the year-ago quarter’s figure. Adjusted operating margin of 9.1% increased 450 basis points from 4.5% in the third-quarter of fiscal 2019.
Interest expenses and other amounted to $33.2 million, up 13.2% from $29.3 million in the prior-year quarter.
Backlog came in at $3.34 billion, down year over year and on a sequential basis due to divestitures, sunsetting programs and production rate reductions.
Aerospace Structures: Segment sales totaled $369 million, down 24.8% from $490.3 million in the year-ago quarter. Operating income was $18.3 million, reflecting a significant improvement from operating loss of $49.8 million incurred in the year-ago period.
Integrated Systems: Segment sales rose 9% year over year to $275.2 million. Operating income was $47.9 million, up 19.9% from the year-ago level of $39.9 million.
Product Support: Segment sales declined 10.5% year over year to $64 million in the reported quarter. Operating income amounted to $9.5 million, down 16.5% from the year-ago figure of $11.5 million.
As of Dec 31, 2019, Triumph Group’s cash and cash equivalents totaled $53.6 million, compared with $92.8 million as of Mar 31, 2019.
Its long-term debt (excluding current portion) amounted to $1.40 billion as of Dec 31, 2019, compared with $1.48 billion as on Mar 31, 2019.
Net cash generated from operating activities in the first nine months of fiscal 2020 was $39.3 million, compared with net cash used worth $193.1 million a year ago.
The company’s capital expenditures were $27.3 million in the first nine months of fiscal 2020 compared with $34.8 million in the prior-year quarter.
Triumph Group partially reduced its fiscal 2020 guidance.
It reduced the upper end of its adjusted earnings per share projection from $2.35-$2.95 to $2.35-$2.55. The Zacks Consensus Estimate for the metric, pegged at $2.54, lies above the mid-point of the company’s newly guided range.
Based on anticipated aircraft production rates and including the timing of pending program transfers, the company continues to expect revenues in the $2.8-$2.9 billion range. The Zacks Consensus Estimate for the same is pegged at $2.88 billion, which lies above the mid-point of the company’s projection.
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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