Triumph Group (TGI) Beats EPS and Revenue Forecasts in Fiscal Q4 2024
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Triumph Group (TGI) Beats EPS and Revenue Forecasts in Fiscal Q4 2024

Triumph Group reported robust financial results for its fourth quarter of fiscal 2024, with net sales reaching $358.6 million and operating income at $44.8 million.
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Triumph Group, Inc. (NYSE: TGI) reported robust financial results for its fourth quarter of fiscal 2024, which ended on March 31, 2024.

The company achieved net sales of $358.6 million, marking an impressive organic sales growth of 11%. Operating income for the quarter was $44.8 million, translating to an operating margin of 12.5%. When adjusted, operating income stood at $55.8 million, with an adjusted operating margin of 15.6%.

Triumph’s net income from continuing operations was $5.5 million, or $0.07 per diluted share. However, when adjusted, net income from continuing operations rose to $23.3 million, or $0.31 per diluted share. The company also reported an adjusted EBITDAP of $58.3 million, resulting in an adjusted EBITDAP margin of 16.3%. Additionally, Triumph generated $77.7 million in cash from operations and achieved a free cash flow of $72.1 million.

The fiscal year performance also showed strong results, with Triumph reporting net sales of $1.19 billion, reflecting a 13% organic sales growth. The company recorded an operating income of $86.5 million, with a 7.3% operating margin.

Adjusted operating income was $114.9 million, with an adjusted operating margin of 9.6%. Despite a net loss from continuing operations of ($34.5) million, or $(0.46) per share, the adjusted net loss was significantly lower at ($4.4) million, or $(0.06) per share.

Triumph Group Beats EPS Expectations by $0.10 in Fiscal Q4

Triumph Group’s fourth-quarter performance exceeded Wall Street’s expectations, which had projected earnings per share (EPS) of $0.21 and revenue of $352.23 million.

Triumph delivered an adjusted EPS of $0.31, significantly surpassing the forecast by $0.10. The company’s actual revenue of $358.6 million also outperformed the expected figure by $6.37 million, highlighting Triumph’s strong execution and market positioning.

Triumph’s ability to surpass expectations can be attributed to several factors, including an 11% organic sales growth and a robust aftermarket segment.

The Commercial Aftermarket sales surged by 47.1%, driven by the continued recovery in air travel metrics, which positively impacted both spare part sales and repair and overhaul services. Military Aftermarket sales also rose by 20.7%, primarily due to increased spares and repairs for military rotorcraft programs.

Despite some challenges, such as decreased Military OEM sales by 11.2% due to lower sales on military rotorcraft like the V-22, Triumph managed to offset these declines with increased production volumes on other military programs. The company’s strategic divestitures and restructuring efforts also played a crucial role in enhancing its financial performance, enabling it to achieve its strongest margins of the fiscal year.

Triumph Group Expects Operating Income to Reach $140 M in FY 2025

Looking ahead, Triumph Group has provided optimistic guidance for fiscal 2025. The company projects net sales of approximately $1.2 billion, which aligns with the fiscal 2024 results.

Operating income is expected to reach around $140.0 million, reflecting an operating margin of 12%. Triumph also anticipates an adjusted EBITDAP of approximately $182.0 million, with an adjusted EBITDAP margin of 15%.

The company forecasts earnings per diluted share of approximately $0.42 for fiscal 2025. Additionally, Triumph expects cash flow from operations to range between $30.0 million and $50.0 million, with free cash flow projected between $10.0 million and $25.0 million. This positive outlook underscores Triumph’s confidence in its strategic initiatives and market opportunities.

Strategic Actions and Market Outlook

Triumph Group’s strategic actions during fiscal 2024 have positioned the company for continued growth and improved financial performance. The divestiture of the third-party Product Support MRO business and the significant debt reduction have strengthened the company’s balance sheet, enabling it to focus on its core OEM and aftermarket product lines.

The anticipated market demand from the aerospace and defense upcycle is expected to drive top and bottom-line growth rates at or above market levels, benefiting from a focus on OEM and related aftermarket product lines.

Triumph’s strategic initiatives, combined with the recovery in narrowbody aircraft rates and the continued improvement in air travel metrics, are expected to drive positive free cash flow and strong margins. The company’s focus on capturing new business and expanding its backlog positions it well to capitalize on market opportunities and deliver sustained growth in the coming fiscal year.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.