Triumph Group Inc.’s (TGI) adjusted earnings from continuing operations for the fiscal first quarter 2015 ended Jun 30, 2014, came in at $1.19 per share, missing the Zacks Consensus Estimate by a penny. The bottom line also decreased 22.7% from the year-earlier adjusted profit of $1.54 per share.
Including non-recurring items, GAAP earnings per share were $2.46, up from $1.50 per share in the prior-year quarter.
Total Revenue
In the reported quarter, net sales decreased almost 5% year over year to $896.9 million due to a 6% decline in organic sales. Organic sales declined because of production rate cuts on the 747-8 and V-22 programs. Lower revenues on The Boeing Company’s (BA) 767 program also led to the decline. The reported figure also missed the Zacks Consensus Estimate of $919.0 million.
Quarterly Operational Highlights
Operating income in the fiscal first quarter increased approximately 70.2% year over year to $240.5 million.
Segment Performance
Aerostructures: Segment sales were $611.9 million, down 6.1% year over year. Organic sales were down 6% primarily due to production rate cuts on the 747-8 program, lower revenues on the 767 program and for shifting several C-17 shipments into the fiscal second quarter 2015.
Operating income was $70.9 million, down 29.4% year over year.
Aerospace Systems: Segment sales were up a marginal $0.04 million year over year to $219.9 million. Organic sales for the quarter decreased 5% due to a cut in the V-22 program and lower military sales.
Operating income was $37.4 million, down 12.2% year over year.
Aftermarket Services: Segment revenues were $67.6 million, down from $74.4 million in the year-ago period. Organic sales were down 9% primarily due to the timing of completion of certain contracts and continued military weakness.
Operating income was $10.5 million, down from $11.2 million in the first quarter fiscal 2014.
Financial Update
During the first quarter fiscal 2015, Triumph’s cash balance was $25.5 million compared with $29.0 million as of Mar 31, 2014. Total debt was $1,757.6 million compared with $1,550.4 million as of Mar 31, 2014. The debt-to-capitalization ratio in the reported quarter stood at 42.4%.
Guidance
For fiscal 2015, the company forecasts sales in the range of $3.8 billion to $3.9 billion. Adjusted earnings per share from continuing operations for fiscal 2015 are expected in the range of $5.75 to $5.90.
The company also maintained its adjusted EBITDA guidance for fiscal 2015 of $665.0 million to $680.0 million.
Zacks Rank
The company expects to strengthen its performance through fiscal 2015, particularly in the second half of the year. Triumph is focused on global expansion and is striving to achieve a balance between its segments, end markets and customers.
During the quarter, Triumph Group acquired the hydraulic actuation business of GE Aviation, a subsidiary of General Electric Company (GE). This transaction further strengthened Triumph Group’s Aerospace Systems segment.
The stock currently carries a Zacks Rank #2 (Buy). A better-ranked stock to look out for in this aerospace and defense equipment industry includes Alliant Techsystems Inc. (ATK), holding a Zacks Rank #1 (Strong Buy).
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