Why Is Triumph Group (TGI) Down 0.1% Since Last Earnings Report?
It has been about a month since the last earnings report for Triumph Group (TGI). Shares have lost about 0.1% 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 drivers.
Triumph Group Q4 Earnings Top Estimates, Sales Rise Y/Y
Triumph Group reported fourth-quarter fiscal 2023 (ended Mar 31, 2023) adjusted earnings of 39 cents per share, which surpassed the Zacks Consensus Estimate of 26 cents by 50%. The bottom line came in line with the prior-year comparable figure.
Including one-time adjustments, TGI reported a GAAP loss of 27 cents per share in the fiscal 2023 fourth quarter compared with 11 cents in the prior-year quarter.
For the full year, Triumph Group reported adjusted earnings of 77 cents per share, which beat the Zacks Consensus Estimate of 56 cents by 37.5%.
Total Sales
Triumph Group’s net sales in the quarter under review were $393.3 million, which beat the Zacks Consensus Estimate of $347 million by 13.3%. The top line also improved 1.7% from $386.7 million in the year-ago quarter.
Excluding divestitures and exited programs, organic sales in the quarter were up 21% year over year. The rise was driven by increases in commercial OEM production rates, accelerating MRO demand and recovering military volumes.
Operational Highlights
In the fourth quarter of fiscal 2023, Triumph Group generated an adjusted operating income of $59.9 million, which increased 39.2% from the year-ago reported figure.
Interest expenses and others amounted to $36.9 million, up 20.1% from the prior-year quarter.
Triumph Group’s backlog was $1.58 billion, up 11% from the prior fiscal year-end, primarily on commercial narrowbody platforms.
Segmental Performance
Interiors:The segment’s sales totaled $39.9 million, down 60% from $83 million in the year-ago quarter. The segment reported an operating income of $2.4 million in the fourth quarter of fiscal 2023.
Systems & Support:The segment’s sales improved 23.2% year over year to $353.4 million. The operating income was $71.3 million in the fourth quarter of fiscal 2023.
Financial Position
As of Mar 31, 2023, TGI’s cash and cash equivalents totaled $227.4 million compared with $240.9 million as of Mar 31, 2022.
Its long-term debt (excluding the current portion) amounted to $1.69 billion as of Mar 31, 2023, up from $1.59 billion as of Mar 31, 2022.
The net cash outflow from operating activities as of Mar 31, 2022 was $52.3 million compared with a net cash outflow of $137 million in the year-ago period.
Triumph Group’s capital expenditures were $20.7 million as of Mar 31, 2023 compared with $19.7 million in the prior year.
Guidance
Triumph Group has initiated its financial guidance for fiscal 2024. It expects to generate net sales in the range of $1.39-$1.43 billion. The Zacks Consensus Estimate for revenues is pegged at $1.41 billion, in line with the midpoint of the company’s guided range.
TGI also expects cash used in operations in the range of $60-$80 million in fiscal 2024. Free cash flow is anticipated in the band of $35.0-$50.0 million for fiscal 2024.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -120% due to these changes.
VGM Scores
Currently, Triumph Group has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% 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 broadly trending downward for the stock, and the magnitude of this revision 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 belongs to the Zacks Aerospace - Defense Equipment industry. Another stock from the same industry, Spirit Aerosystems (SPR), has gained 20.1% over the past month. More than a month has passed since the company reported results for the quarter ended March 2023.
Spirit Aerosystems reported revenues of $1.43 billion in the last reported quarter, representing a year-over-year change of +21.9%. EPS of -$1.69 for the same period compares with $0.03 a year ago.
Spirit Aerosystems is expected to post a loss of $0.48 per share for the current quarter, representing a year-over-year change of +60.3%. Over the last 30 days, the Zacks Consensus Estimate has changed -9.5%.
Spirit Aerosystems has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Triumph Group, Inc. (TGI) : Free Stock Analysis Report
Spirit Aerosystems Holdings, Inc. (SPR) : Free Stock Analysis Report
