Yahoo Finance Triumph (TGI) Misses Q2 Earnings and Revenue Estimates
Triumph Group Inc.’s TGI adjusted earnings from continuing operations for second-quarter fiscal 2016 ended Sep 30, 2015, came in at $1.32 per share, lagging the Zacks Consensus Estimate of $1.35 by 2.2%. Also, earnings decreased 7% from $1.42 a year ago.
On a GAAP basis, the company reported earnings of $1.25 per share, compared with $1.32 per share in the prior-year quarter. The difference in reported and adjusted earnings was due to an approximate $5.4 million pre-tax charge (7 cents per share) related to a facility consolidation in the Aerospace Systems Group as a result of the ongoing business review.
Triumph Group Inc. (TGI) - Earnings Surprise | FindTheCompany
Total Revenue
In the reported quarter, net sales were $954.8 million, missing the Zacks Consensus Estimate of $985 million by 3.1%. The top line also declined 4% year over year.
Moreover, organic sales declined 12% primarily due to a lower production rate of key Aerostructures programs.
Operational Highlights
In second-quarter fiscal 2016, the company reported an operating income of $110 million, compared with $114.7 million in the prior-year quarter.
Segment Performance
Aerostructures: Segment sales were $604.9 million, down from $632.5 million in the year-ago quarter. Organic sales were down 17% primarily due to lower production on the C-17, 747-8 and A330 programs. Operating income declined 4.1% to $67.1 million from $70 million in the year-ago quarter.
Aerospace Systems: Segment sales declined 3% year over year to $280.2 million. Organic sales for the quarter decreased 3% mainly due to lower aftermarket sales, order timing on certain military programs and slower commercial rotorcraft demand. Operating income was $46.1 million, down 0.2% year over year from the prior-year level of $46.2 million.
Aftermarket Services: Segment revenues rose 0.7% to $73.8 million in the reported quarter. Organic sales for the quarter declined 11% primarily due to decreased demand of commercial aircraft. Operating income was $9.1 million, down 21.5% from $11.6 million in second-quarter fiscal 2015.
Financial Position
As of Sep 30, 2015, Triumph’s cash balance was $39.1 million compared with $32.6 million as of Mar 31, 2015. As of Jun 30, 2015, long-term debt (excluding current portion) was $1,556.6 million compared with $1,326.3 million as of Mar 31, 2015.
Cash outflow from operations, after pension contributions, during the quarter was $178.5 million as against an inflow of $313.8 million in the year-ago quarter. The company spent $38.1 million as capital expenditure in the quarter compared with $59.1 million in the comparable period last year.
Guidance
For fiscal 2016, the company reiterated revenues in the range of $3.9–$4.0 billion and earnings per share, excluding facility consolidation costs and the pension curtailment charge, between $5.50 and $5.75 per share.
Cash available for debt reduction, acquisitions and share repurchases for fiscal 2016 is expected in the range of $25–$50 million.
Zacks Rank
Currently, Triumph carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the aerospace/defense industry include Ducommun Inc. DCO, sporting a Zacks Rank #1 (Strong Buy), and LMI Aerospace Inc. LMIA and Kratos Defense & Security Solutions, Inc. KTOS, both holding a Zacks Rank #2 (Buy).
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