Triumph Group (TGI) Down 13.8% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Triumph Group (TGI). Shares have lost about 13.8% 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 its most recent earnings report in order to get a better handle on the important catalysts.
Triumph Group Q4 Earnings Miss Estimates, Sales Fall Y/Y
Triumph Group reported fourth-quarter fiscal 2022 (ended Mar 31, 2022) adjusted earnings of 39 cents per share, which missed the Zacks Consensus Estimate of 41 cents by 4.9%. The bottom line, however, surged 290% from 10 cents per share.
Including one-time adjustments, TGI incurred a GAAP loss of 16 cents per share in the fiscal fourth quarter compared with a loss of $1.27 in the prior-year quarter.
For fiscal 2022, the company reported adjusted earnings of 79 cents against a loss of 3 cents incurred in fiscal 2021. The full-year bottom line however missed the Zacks Consensus Estimate of 82 cents by 3.7%.
Total Sales
Triumph Group’s net sales in the quarter under review were $386.7 million, which missed the Zacks Consensus Estimate of $413 million by 6.3%. The top line declined 17.2% from $466.8 million in the year-ago quarter.
Excluding divestitures and sunsetting programs, organic sales in the quarter were down 2% year over year, primarily due to declines in commercial widebody production and the timing of military OEM deliveries.
For fiscal 2022, the company reported net sales of $1.46 billion, down from $1.87 billion at fiscal 2021-end. The full-year sales also missed the Zacks Consensus Estimate of $1.49 billion.
Operational Highlights
In the fourth quarter of fiscal 2022, Triumph Group generated an adjusted operating income of $343 million, which increased 30.6% from the year-ago reported figure. Adjusted operating margin of 11.1% expanded 400 basis points from 7.1% in the fourth quarter of fiscal 2021.
Interest expenses and others amounted to $30.8 million, down 21.1% from the prior-year quarter.
Triumph Group’s backlog was $1.42 billion, down 27.2% on a sequential basis from $1.95 billion.
Segmental Performance
Aerospace Structures: The segment’s sales totaled $99.7 million, down 39.7% from $165.3 million in the year-ago quarter. The segment reported an operating income of $2.7 million for the fourth quarter of fiscal 2022.
Systems & Support: The segment’s sales declined 4.7% year over year to $287 million. Operating income was $49.2 million in the fourth quarter of fiscal 2022.
Financial Position
As of Mar 31, 2022, TGI’s cash and cash equivalents totaled $240.9 million compared with $589.9 million as of Mar 31, 2021.
Its long-term debt (excluding the current portion) amounted to $1.59 billion as of Mar 31, 2022, compared with $1.95 billion as of Mar 31, 2021.
Net cash used in operating activities as of Mar 31, 2022 was $137 million compared with net cash outflow of $173.1 million in the same period last year.
Triumph Group’s capital expenditures were $19.7 million in fiscal 2022 compared with $25.2 million in the prior year.
Guidance
Triumph Group provided its financial guidance for fiscal 2023. The company anticipates adjusted earnings per share (EPS) in the range of 40-60 cents. The Zacks Consensus Estimate for earnings is pegged at $1.03, which lies much above the guided range.
TGI expects net sales in the range of $1.20-$1.30 billion in fiscal 2023. The Zacks Consensus Estimate for revenues of $1.43 billion lies above the company’s guided range.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
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