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Why Is Triumph Group (TGI) Up 3.4% Since Last Earnings Report?

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It has been about a month since the last earnings report for Triumph Group (TGI - Free Report) . Shares have added about 3.4% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Triumph Group due for a pullback? 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 catalysts.

Triumph Group Q2 Earnings Beat Estimates, Sales Increase Y/Y 

Triumph Group reported second-quarter fiscal 2025 (ended Sept. 30, 2024) adjusted earnings of 20 cents per share, which beat the Zacks Consensus Estimate of 3 cents by a massive 566.7%. The bottom line also improved from the adjusted loss of 5 cents per share in the prior-year quarter.

Including one-time adjustments, TGI reported GAAP earnings of 15 cents per share in the second quarter of fiscal 2025 against the loss of 8 cents in the prior-year quarter.

TGI’s Total Sales

Triumph Group’s net sales in the quarter under review were $287.5 million, which beat the Zacks Consensus Estimate of $287 million by a whisker. The top line also improved 1% from $284.7 million in the year-ago quarter.

The rise was driven by higher commercial aftermarket sales and military original equipment manufacturer (OEM) sales.

TGI’s Operational Highlights

In the second quarter of fiscal 2025, Triumph Group generated an adjusted operating income of $36 million, which increased 41.9% from the year-ago reported figure.

Interest expenses and others amounted to $21.9 million, down 26.7% from the prior-year quarter.

Triumph Group’s backlog was $1.90 billion, up from the prior quarter’s level of $1.87 billion.

TGI’s Segmental Performance

Interiors: The segment’s sales totaled $37.5 million, up 6.4% from $35.3 million in the year-ago quarter.

Systems & Support: The segment’s sales increased 0.2% year over year to $250 million.

TGI’s Financial Position

As of Sept. 30, 2024, TGI’s cash and cash equivalents totaled $104.9 million compared with $392.5 million as of March 31, 2024.

Its long-term debt (excluding the current portion) amounted to $0.96 billion as of Sept. 30, 2024, down from $1.07 billion as of March 31, 2024.

The net cash outflow from operating activities as of Sept. 30, 2024 was $142.9 million compared with a net cash outflow of $95.9 million in the year-ago period.

Triumph Group’s capital expenditures were $14.5 million as of Sept. 30, 2024 compared with $11 million in the prior year.

TGI’s 2025 Guidance

Triumph Group partially updated its financial guidance for fiscal 2025. It still expects to generate net sales of nearly $1.2 billion, which is almost in line with the Zacks Consensus Estimate of $1.21 billion.

The company now expects to generate adjusted earnings per share in the range of 70-76 cents in fiscal 2025 compared with the earlier projection of 52 cents per share.

TGI now expects cash flow from operations in the range of $40-$55 million in fiscal 2025 compared with the earlier projection of $30-$50 million. Free cash flow is currently anticipated in the band of $20-$30 million for fiscal 2025 compared with the earlier projection of $10-$25 million.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month.

The consensus estimate has shifted 61.36% due to these changes.

VGM Scores

At this time, Triumph Group has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Triumph Group has a Zacks Rank #1 (Strong Buy). We expect an above average 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, Axon Enterprise (AXON - Free Report) , has gained 6.9% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.

Axon reported revenues of $544.27 million in the last reported quarter, representing a year-over-year change of +31.6%. EPS of $1.45 for the same period compares with $1.02 a year ago.

For the current quarter, Axon is expected to post earnings of $1.51 per share, indicating a change of +34.8% from the year-ago quarter. The Zacks Consensus Estimate has changed -9.8% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Axon. Also, the stock has a VGM Score of F.


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