Triumph Group (TGI) Down 0.8% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Triumph Group (TGI). Shares have lost about 0.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Triumph Group due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Triumph Group Q3 Earnings Miss Estimates, Sales Up Y/Y
Triumph Group incurred third-quarter fiscal 2024 (ended Dec 31, 2023) adjusted loss of 16 cents per share, which missed the Zacks Consensus Estimate of earnings of 13 cents. The bottom line also deteriorated from earnings of 4 cents reported in the prior-year quarter.
Including one-time adjustments, TGI reported a GAAP loss of 15 cents per share in the third quarter of fiscal 2024 against earnings of 9 cents in the prior-year quarter.
Total Sales
Triumph Group’s net sales in the quarter under review were $285 million, which missed the Zacks Consensus Estimate of $366.3 million by 22.2%. However, the top line improved 8.9% from $261.7 million in the year-ago quarter.
Excluding divestitures and exited programs, organic sales in the quarter were up 13% year over year. The rise was driven by increased commercial original equipment manufacturer (OEM) sales.
Operational Highlights
In the third quarter of fiscal 2024, Triumph Group generated an adjusted operating income of $19.8 million, which decreased 18.9% from the year-ago reported figure.
Interest expenses and others amounted to $32.4 million, up 5.4% from the prior-year quarter.
Triumph Group’s backlog was $1.87 billion, up 18% from the prior fiscal year-end, primarily driven by commercial OEM platforms.
Segmental Performance
Interiors: The segment’s sales totaled $44.1 million, up 1.1% from $43.6 million in the year-ago quarter. The segment reported an operating loss of $2.1 million in the third quarter of fiscal 2024 against operating income of $5 million in the prior-year quarter.
Systems & Support: The segment’s sales improved 10.5% year over year to $241.1 million. The operating income was $33.8 million in the third quarter of fiscal 2024, up from $31.6 million in the year-ago quarter.
Financial Position
As of Dec 31, 2023, TGI’s cash and cash equivalents totaled $162.9 million compared with $227.4 million as of Mar 31, 2023.
Its long-term debt (excluding the current portion) amounted to $1.63 billion as of Dec 31, 2023, down from $1.69 billion as of Mar 31, 2023.
The net cash outflow from operating activities as of Dec 31, 2023, was $68.3 million compared with a net cash outflow of $112.3 million a year ago.
Triumph Group’s capital expenditures were $16.3 million for the nine months ended Dec 31, 2023 compared with $12.3 million in the prior year.
Guidance
Triumph Group updated its financial guidance for fiscal 2024. It now expects to generate net sales in the band of $1.17-$1.20 billion, down from the previous range of $1.43-$1.47 billion. The Zacks Consensus Estimate for revenues is pegged at $1.45 billion, much higher than the company’s guided range.
TGI expects cash provided by operations in the range of $65-$85 million in fiscal 2024. Free cash flow is anticipated in the band of $40-$55 million for fiscal 2024.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -94.92% due to these changes.
VGM Scores
At this time, Triumph Group has a poor Growth Score of F, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Triumph Group has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Triumph Group is part of the Zacks Aerospace - Defense Equipment industry. Over the past month, Spirit Aerosystems (SPR), a stock from the same industry, has gained 26.3%. The company reported its results for the quarter ended December 2023 more than a month ago.
Spirit Aerosystems reported revenues of $1.81 billion in the last reported quarter, representing a year-over-year change of +37.3%. EPS of $0.48 for the same period compares with -$1.46 a year ago.
Spirit Aerosystems is expected to post a loss of $0.21 per share for the current quarter, representing a year-over-year change of +87.6%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.8%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Spirit Aerosystems. Also, the stock has a VGM Score of C.
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Triumph Group, Inc. (TGI) : Free Stock Analysis Report
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