TriMas (TRS) Q3 Earnings and Revenues Beat Estimates, Up Y/Y
TriMas Corporation TRS reported third-quarter 2020 adjusted earnings of 43 cents per share, which beat the Zacks Consensus Estimate of 39 cents. The bottom line also improved 19% from the prior-year quarter. Although some end-markets remained challenged due to the impact of the coronavirus pandemic, strong sales in the Packaging group and contribution from recent acquisitions drove results in the quarter under review.
Including the impact of one-time items, the company reported a loss per share of $2.32, against the year-ago quarter’s earnings of 34 cents per share.
The company’s revenues of $199 million surpassed the Zacks Consensus Estimate of $194 million and also increased 6% year over year. This was driven by record sales in the Packaging segment and contribution from recent acquisitions. The Packaging segment has been benefiting from high demand for dispensing pumps and closure products sold into applications that help fight the spread of germs or are used in cleaning amid the pandemic. Higher sales of products utilized in food and beverage applications have also been contributing to the segment’s performance.
However, weak performance in the aerospace segment due the impact of significantly lower air travel, and reduced commercial and business jet production as a result of the global pandemic was a dampener. Also, demand in industrial businesses remained weak amid the pandemic.
TriMas Corporation Price, Consensus and EPS Surprise
TriMas Corporation price-consensus-eps-surprise-chart | TriMas Corporation Quote
Costs & Margins
Cost of sales increased 6% year over year to $148 million in the reported quarter. Gross profit rose 6% year over year to $52 million. Gross margin remained flat at 26% compared with the prior-year quarter.
Selling, general and administrative expenses inched up 1% year over year to $26 million. Adjusted operating profit increased 20% year over year on higher sales and more favorable product sales mix to around $30 million. Adjusted operating margin expanded 170 basis points year over year to 14.8% in the reported quarter.
Segment Performance
Packaging: Net sales improved 28% year over year to $135 million. Adjusted operating profit surged 39% year over year to $28 million in the reported quarter.
Aerospace: Net sales declined 23% year over year to $39 million from the prior-year quarter. The segment reported adjusted operating profit of $3.7 million that indicated a slump of 53% year over year.
Specialty Products: The segment’s revenues declined 22% year over year to $25 million. Adjusted operating profit fell 7% year over year to $3.4 million.
Financial Performance
TriMas ended third-quarter 2020 with $389.2 million of unrestricted cash and aggregate availability under its revolving credit facility. As of Sep 30, 2020, total debt was $295.6 million compared with $2694.7 million as of Dec 31, 2019.
The company generated around $79 million of cash from operating activities in the first nine months of 2020 compared with $61 million in the prior-year comparable period. TriMas resumed its share buyback program during third quarter. Year to date, the company utilized $95.2 million for acquisitions and repurchased approximately $36 million of its outstanding common stock. As of Sep 30, 2020, $165.1 million remained available under its repurchase authorization.
To strengthen its Packaging segment, TriMas has entered into an agreement to acquire Affaba & Ferrari, a designer and manufacturer of engineered caps and closures for food and beverage, and industrial applications.
Outlook for 2020
The company expects the ongoing momentum in the Packaging segment to continue. However, the momentum will be offset by continued weakness in the Aerospace and Specialty Products segments. Overall sales in 2020 is expected to increase 4% to 6% year over year. TriMas anticipates 2020 adjusted earnings per share between $1.45 and $1.50.
Share Price Performance
Year to date, shares of TriMas have fallen 24.0% compared with the industry’s decline of 16.8%.
Zacks Rank & Stocks to Consider
TriMas currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Industrial Products sector are Crown Holdings, Inc. CCK, iRobot Corporation IRBT and Worthington Industries, Inc. WOR. All of these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Crown Holdings has a projected earnings growth rate of 11.7% for fiscal 2020. Year to date, the company’s shares have appreciated 20%.
iRobot has an estimated earnings growth rate of 18.8% for the ongoing year. The company’s shares have rallied 61% so far this year.
Worthington has an expected earnings growth rate of 19.2% for 2020. The stock has climbed 17% year to date.
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