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Triumph Group (TGI) Q1 Earnings Lag Estimates, Sales Fall Y/Y

Triumph Group Inc.’s TGI first-quarter fiscal 2021 (ended Jun 30, 2020) adjusted loss was 19 cents per share, wider than the Zacks Consensus Estimate of a loss of 17 cents. The bottom line also deteriorated from earnings of 46 cents recorded in the prior-year quarter.

Including one-time adjustments, the company incurred GAAP loss of $5.35 per share in the fiscal first quarter against earnings of 36 centsreported in the year-ago quarter.

Reduced sales and operating income in the fiscal first quarter resulted in the deterioration in the bottom-line figure.

Total Sales

Net sales in the quarter under review came in at $495.1 million, outpacing the Zacks Consensus Estimate of $463 million by 7%. However, the top line slumped 32.2% on a year-over-year basis.

After taking divestitures into account, organic sales in the quarter went down 29% year over year due to declines in Aerospace Structures associated with planned reductions from the company’s portfolio transformation and the COVID-19 pandemic.

Triumph Group, Inc. Price, Consensus and EPS Surprise

 

Triumph Group, Inc. Price, Consensus and EPS Surprise

Triumph Group, Inc. price-consensus-eps-surprise-chart | Triumph Group, Inc. Quote

Operational Highlights

In first-quarter fiscal 2021, the company generated adjusted operating income of $15.4 million, which declined 62.9% from the year-ago quarter’s figure. Adjusted operating margin of 3.1% contracted 260 basis points from 5.7% in the first-quarter of fiscal 2020.

Interest expenses and other amounted to $35 million, up from $27.5 million in the prior-year quarter.

Backlog came in at $2.70 billion, down year over year and on a sequential basis due to sunsetting programs and recent production rate reductions.

Segmental Performance

Aerospace Structures: Segment sales totaled $257.9 million, down 38.5% from $419.2 million in the year-ago quarter. The segment incurred operating loss of $256.1 million, reflecting a significant deterioration from the year-ago period.

Systems & Support: Segment sales declined 24% year over year to $257.9 million. Operating income was $25.4 million, reflecting deterioration from the year-ago quarter’s operating income of $44 million.

Financial Position

As of Jun 30, 2020, Triumph Group’s cash and cash equivalents totaled $30.9 million compared with $53.6 millionas of Dec 31, 2019.

Its long-term debt (excluding current portion) amounted to $1.56 billion as of Jun 30, 2020, compared with $1.40 billion as of Dec 31, 2019.

Net cash used in operating activities in the first quarter of fiscal 2021 was $197.5 million compared tonet cash generated worth $5 million a year ago.

The company’s capital expenditures were $7.7 million in the fiscal first quarter compared with $7.1 million in the year-earlier quarter.

Guidance

Triumph Group provided financial guidance for fiscal 2021. The company expects to generate net sales of $1.8-$1.9 billion. The Zacks Consensus Estimate for revenues of $1.99 billion lies above the company provided guidance.

Zacks Rank

Triumph Group currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Defense Releases

Teledyne Technologies TDY reported second-quarter 2020 adjusted earnings of $2.43 per share, which surpassed the Zacks Consensus Estimate of $2.01 by 20.9%.

Lockheed Martin LMT reported second-quarter 2020 adjusted earnings of $6.13 per share, which surpassed the Zacks Consensus Estimate of $5.71 by 7.4%.

Hexcel Corporation HXL reported second-quarter 2020 adjusted earnings of 8 cents per share, which missed the Zacks Consensus Estimate of 20 cents by 60%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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