Triumph Group (TGI) Tops Q1 EPS by 1c, Revenues Beat; Offers FY19 EPS/Revenue Outlook

Triumph Group (NYSE: TGI) reported Q1 EPS of $0.34, $0.01 better than the analyst estimate of $0.33. Revenue for the quarter came in at $832.9 million versus the consensus estimate of $809.31 million.

• Net sales were $832.9 million.
• Operating loss was ($66.5) million, which includes the non-cash ASU 2017-07 pension adjustment of ($87.2) million. On an adjusted basis, operating income was $29.5 million with an adjusted operating margin of 3.5%.
• Net loss was ($76.5) million, or ($1.54) per share. On an adjusted basis, net income was $17.0 million, or $0.34 per diluted share.
• Cash used in operations was ($65.7) million, and free cash use was ($77.9) million.
• Guidance for fiscal 2019 for net sales of $3.3 to $3.4 billion and earnings per share of ($0.55) to $0.15, or $1.50 to $2.10 per diluted share on an adjusted basis.
• Management provides guidance for cash used from operations of ($150.0) to ($190.0) million and free cash use of ($200.0) to ($250.0) million, which includes approximately ($180.0) million related to the reduction in prior year customer advances, and approximately ($130.0) million related to the Global 7500 program.

“Triumph’s first quarter results demonstrate our continued progress towards achieving our financial performance targets,” stated Daniel J. Crowley, Triumph’s president and chief executive officer. “Consistent with our projections for fiscal 2019, we delivered a year-over-year increase in net sales, with all three business segments generating organic sales growth.”

Mr. Crowley continued, “Our first quarter cash usage was consistent with our expectations and showed both year-over-year and sequential improvement. Excluding the cash consumed by the Global 7500 program and the liquidation of prior year customer advances, free cash flow was positive in the first quarter.”

Mr. Crowley continued, “We expect to use significantly less cash for Aerospace Structures’ programs in fiscal 2019 and fiscal 2020 compared to the two prior years. Our fiscal 2019 cash guidance reflects the improvements the Company has made operationally and in contract negotiations over the past two years and is another waypoint towards consistent positive cash flow. Our continued portfolio reshaping in the first quarter included agreements to divest two non-core businesses, in addition to completing a third divestiture following the end of the quarter, which we expect to further enhance our future profitability and cash flow. Additional divestitures are planned for the second half of FY19.”

GUIDANCE:

Triumph Group sees FY2019 EPS of $1.50-$2.10, versus the consensus of $1.78. Triumph Group sees FY2019 revenue of $3.3-3.4 billion, versus the consensus of $3.3 billion.

For earnings history and earnings-related data on Triumph Group (TGI) click here.

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