GR Goodrich Corp. (The)

On January 30, Triumph Group Inc. (TGI) reported encouraging results for the third quarter of fiscal 2012. Earnings per diluted share came in at $1.29, showing an improvement from $0.88 in the year-ago comparable quarter. Results also surpassed the Zacks Consensus Estimate of $1.12.

The encouraging results were attributable to improved execution, synergy realization and expense cutback across almost all business segments.

Revenue

In the third quarter of 2012, net sales inched up 2% year over year to $826.0 million, with organic growth reaching 2%.

Segment wise, sales from Aerostructures surged 2% to $626.0 million from $613.5 million in the prior-year comparable quarter. Aerospace System revenue grew 7% year over year to $133.3 million, while Aftermarket Services dropped 8% to $68.6 million from the all-time high record of $74.7 million in the year-ago quarter due to a reduction in military sales.

Margins

Operating income in the third quarter accelerated to $117.6 million (which includes acquisition and integration expenses of $2,095-- primarily associated with the acquisition of Vought for the three months ended December 31, 2011) from $86.7 million (which includes acquisition and integration expenses of $1,000 associated with the Vought acquisition for the three ended December 31, 2010), a year ago. Operating margin increased to 14.2% from 10.7% in third-quarter 2011.

EBITDA jumped 38.5% year over year to $142.8 million in the third quarter of fiscal 2012. EBIDTA margin rose to 17.3% compared with 12.7% in the year- ago quarter.

Balance Sheet

Exiting the third quarter, Triumph’s cash and cash equivalents were approximately $32.7 million compared with $36.4 million in the previous quarter. Long-term debt (net of current portion) was up sequentially at $1,070.5 million from $1,068.5 million in the previous quarter.

Cash Flow

Cash flow from operations was recorded at $241.2 million (prior to the pension contribution of $97.7 million), in the nine-month period ended December 31, 2011; up from $189.6 million in the year-ago period. Capital spending plummeted to $58.7 million from $68.7 million in the nine-month period ended December 31, 2010.

Outlook

Significant cash flow generated during the quarter along with a stronger balance sheet looks impressive for the coming quarters. For fiscal 2012, management raised its earnings per share guidance from continuing operations to be approximately $4.70 per diluted share excluding integration costs from $4.50 per diluted share expected earlier. The raised guidance is primarily based on the anticipation of strong segmental performance and rising aircraft production rate.

Based in Wayne, Pennsylvania, Triumph Group offers a variety of products and services to the aerospace industry. The company serves commercial and regional airlines, air cargo carriers, as well as OEMs of commercial, regional, business and military aircrafts. It faces stiff competition from its peers, such as AAR Corp. (AIR) and Goodrich Corp. (GR).                               

We currently maintain a long-term Neutral recommendation on the stock. Triumph Group has a Zacks #3 Rank, which translates into a short-term Hold rating (1-3 months).

 
AAR CORP (AIR): Free Stock Analysis Report
 
GOODRICH CORP (GR): Free Stock Analysis Report
 
TRIUMPH GRP INC (TGI): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research