Triumph Group (TGI) Q4 Earnings Lag, Revenues Top Estimates

Triumph Group Inc.’s (NYSE:TGI) adjusted earnings from continuing operations in fourth-quarter fiscal 2018 (ended Mar 31, 2018) came in at $1.01 per share, which missed the Zacks Consensus Estimate of $1.02 by 1%. Reported earnings also declined 67.3% from $3.09 per share a year ago.

Excluding one-time adjustments, the company reported GAAP loss of $6.04 in the first-quarter, compared to the year-ago quarter’s loss of $2.57.

Total Revenues

In the reported quarter, net sales were $896.9 million, beating the Zacks Consensus Estimate of $825 million by 8.7%. The top line, however, declined 2.5% year over year.

Organic sales in the quarter improved year over year, primarily driven by higher production deliveries on the Global Hawk/Triton, Global 7000, and G650 programs, partially offset by the completion of and production rate reductions on previously disclosed programs.

Operational Highlights

In fourth-quarter fiscal 2018, the company’s operating loss was $298.8 million, wider than the loss of $126.8 million in the year-ago quarter.

Quarterly Segment Performance

Aerospace Structures: Segment sales were $550.4 million, down 1.8% from $560.7 million in the year-ago quarter. Operating loss for the segment was $324.6 million, wider than the loss of $155.6 million in the year-ago quarter.

Integrated Systems: Segment sales dipped 2.4% year over year to $275.3 million. Operating income was $55 million, down from the year-ago level of $56 million.

Product Support: Segment sales fell 2.4% year over year to $79.1 million in the reported quarter. Operating income was $13.6 million in the fiscal fourth quarter against the year-ago quarter’s income of $12.8 million.

Financial Position

As of Mar 31, 2018, Triumph’s cash and cash equivalents were $35.8 million compared with $69.6 million as of Mar 31, 2017. As of Mar 31, 2018, long-term debt (excluding current portion) was $1.42 billion compared with $1.04 billion as of Mar 31, 2017.

Cash outflow from operations at the end of fiscal 2018 was $288.9 million, compared to cash inflow of $281.5 million at fiscal 2017-end. The company spent $42.1 million as capital expenditure in fiscal 2018, compared to $51.8 million spent in fiscal 2017.

Guidance

Based on anticipated aircraft production rates and divestitures completed in fiscal 2018, Triumph Group projects revenues for fiscal 2019 in the range of $3.3-$3.4 billion. It expects revenues to increase in fiscal 2019 as development programs enter production and sales from continuing programs and new wins offset sunsetting programs.

On the bottom-line front, the company expects to generate adjusted earnings per share in the range of $1.50-$2.10.

Zacks Rank

Triumph Group currently carries a Zacks Rank #5 (Strong Sell).

Other Defense Releases

Huntington Ingalls Industries’ (NYSE:HII) first-quarter 2018 earnings of $3.48 per share missed the Zacks Consensus Estimate of $4.07 by 14.5%. The company carries a Zacks Rank #4 (Sell).

Spirit AeroSystems Holdings (NYSE:SPR) reported first-quarter 2018 earnings of $1.10 per share, which missed the Zacks Consensus Estimate of $1.35 by 18.5%.It carries a Zacks Rank #3 (Hold).

L3 Technologies (NYSE:LLL) posted first-quarter 2018 earnings of $2.34 per share from continuing operations, surpassing the Zacks Consensus Estimate of $1.99 by 2.2%. It carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>