Alliant Techsystems Inc. (ATK) reported the second-quarter fiscal 2015 adjusted earnings of $3.00 per share, surpassing the Zacks Consensus Estimate of $2.94 by around 2%. Quarterly earnings increased 6.4% year over year primarily on the back of higher sales and a decline in pension expenses.
The company’s quarterly GAAP earnings per share were $2.97 versus $2.86 a year ago. The variance between adjusted and GAAP earnings was due to the combined impact of a transaction cost of 10 cents and a gain of 7 cents from tax settlement.
Total Revenue
Alliant's total revenue of $1.27 billion missed the Zacks Consensus Estimate by 0.6%. The reported revenue, however, exceeded the year-ago figure by 11.4% primarily due to higher contribution from all segments – Sporting Group (up 26.4% year over year), Defense Group (up 3.4%) and Aerospace Group (up 3.1%).
Operational Highlights
In the quarter under review, Alliant's cost of sales increased 11.2% year over year to $973.2 million.
The company reported gross profit of $300.1 million in the quarter, up 12.2% from the prior-year level.
Total operating expenses in the fiscal second quarter stood at $139.4 million compared with $119.2 million a year ago. Higher selling and general and administrative expenses resulted in an approximate 17% rise in expenses.
In the reported quarter, Alliant's interest expenses increased 53.3% year over year to $23.4 million.
Financial Update
As of Sep 28, 2014, Alliant had cash and cash equivalents of $42.7 million compared with $266.6 million as of Mar 31, 2014.
Long-term debt, as of Sep 28, 2014, was $1,923.5 million versus $1,843.8 million in the fiscal 2014 year end.
During the first six months of fiscal 2015, cash from operating activities was $24.5 million versus $42.6 million in the year-ago period.
Alliant’s capital expenditure was $59.7 million during the six months ended on Sep 28, 2014 versus $52.3 million in the prior-year period.
Guidance
Alliant updated its sales guidance for fiscal 2015 in the range of $5.15–$5.20 billion from the previous projection in the band of $5.15–$5.25 billion.
The company reiterated its fiscal 2015 earnings and free cash flow projection in the range of $11.50–$11.90 per share and $280–$305 million, respectively.
In fiscal 2015, the company’s capital expenditure is expected to be around $135 million.
Another Peer Release
Triumph Group Inc.’s (TGI) adjusted earnings from continuing operations for fiscal second-quarter 2015, ended Sep 30, 2014, came in at $1.42 per diluted share, beating the Zacks Consensus Estimate by just a cent.
Zacks Rank
Alliant currently holds a Zacks Rank #2 (Buy). Other stocks worth considering in the same industry include Spirit AeroSystems Holdings, Inc. (SPR) and HEICO Corporation (HEI). Spirit AeroSystems carries a Zacks Rank #1 (Strong Buy) while HEICO holds a Zacks Rank #2 (Buy).
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