Yahoo Finance Why Is Triumph Group (TGI) Up 3.7% Since Last Earnings Report?
It has been about a month since the last earnings report for Triumph Group (TGI). Shares have added about 3.7% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Triumph Group due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Triumph Group Q2 Earnings Top Estimates, EPS View Up
Triumph Group reported second-quarter fiscal 2022 (ended Sep 30, 2022) adjusted earnings of 7 cents per share in contrast to Zacks Consensus Estimate of a loss of 4 cents. The bottom line however declined 30% from 10 cents per share.
Including one-time adjustments, TGI reported GAAP earnings of $1.63 per share for the fiscal second quarter against a loss of 14 cents per share in the prior-year quarter.
Total Sales
Triumph Group’s net sales in the quarter under review were $307.6 million, which beat the Zacks Consensus Estimate of $294 million by 4.5%. The top line, however, declined 13.9% from $357.4 million in the year-ago quarter.
Excluding divestitures and exited programs, organic sales in the quarter were up 13% year over year, primarily driven by increases in commercial narrow-body production and commercial MRO.
Operational Highlights
In the second quarter of fiscal 2022, Triumph Group generated an adjusted operating income of $30.4 million, which increased 8.7% from the year-ago reported figure. The adjusted operating margin of 9.9% expanded 210 basis points from 7.8% in the second quarter of fiscal 2021.
Interest expenses and others amounted to $32.5 million, down 5.1% from the prior-year quarter.
Triumph Group’s backlog was $1.57 billion, up 2.6% on a sequential basis from $1.53 billion.
Segmental Performance
Aerospace Structures: The segment’s sales totaled $33.4 million, down 69.2% from $108.6 million in the year-ago quarter. The segment reported an operating income of $5.9 million for the second quarter of fiscal 2022.
Systems & Support: The segment’s sales improved 10.2% year over year to $274.2 million. The operating income was $43.4 in the second quarter of fiscal 2022.
Financial Position
As of Sep 30, 2022, TGI’s cash and cash equivalents totaled $104.5 million compared with $240.9 million as of Mar 31, 2022.
Its long-term debt (excluding the current portion) amounted to $1.59 billion as of Sep 30, 2022, flat with the long-term debt as of Mar 31, 2022.
Net cash outflow from operating activities as of Sep 30, 2022 was $112.4 million compared with a net cash outflow of $185.5 million in the same period last year.
Triumph Group’s capital expenditures were $7.2 million as of Sep 30, 2022 compared with $7.5 million in the prior year.
Guidance
Triumph Group partially updated its financial guidance for fiscal 2023. The company currently anticipates adjusted earnings per share (EPS) in the range of 40-60 cents, compared with the earlier outlook of 28-48 cents. The Zacks Consensus Estimate for earnings is pegged at 69 cents per share, much higher than the guided range.
TGI still expects to generate net sales of $1.3 billion in fiscal 2023. The Zacks Consensus Estimate for revenues is pegged at $1.34, slightly higher than the company’s guided range.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 111.76% due to these changes.
VGM Scores
Currently, Triumph Group has an average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of C 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.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Triumph Group has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Triumph Group belongs to the Zacks Aerospace - Defense Equipment industry. Another stock from the same industry, Aerojet Rocketdyne Holdings (AJRD), has gained 9.1% over the past month. More than a month has passed since the company reported results for the quarter ended September 2022.
Aerojet Rocketdyne reported revenues of $549.8 million in the last reported quarter, representing a year-over-year change of +0.8%. EPS of $0.45 for the same period compares with $0.58 a year ago.
Aerojet Rocketdyne is expected to post earnings of $0.60 per share for the current quarter, representing a year-over-year change of +39.5%. Over the last 30 days, the Zacks Consensus Estimate has changed -2.2%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Aerojet Rocketdyne. Also, the stock has a VGM Score of F.
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Triumph Group, Inc. (TGI) : Free Stock Analysis Report
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