What happened

Aerospace parts manufacturer Triumph Group (TGI -1.85%) posted better-than-expected results and provided an upbeat outlook for the future. Investors are hoping that the long-awaited turnaround at Triumph is finally taking hold, sending shares up as much as 16% on Wednesday morning.

So what

Triumph, a maker of components for military and commercial aerospace platforms, has been a tough stock to love over the past decade. The shares have lost about 85% of their value since the mid-2010s, and the company has been slowly trying to rework its business, including by restructuring or selling unprofitable units. The challenge was complicated first by the pandemic and then by the supply chain disruptions that followed. 

At long last, investors are beginning to see the fruits of all that labor. Triumph earned $0.39 per share in its fiscal fourth quarter (ending March 31) on revenue of $393.29 million, beating analyst expectations for $0.26 per share in earnings on sales of $345 million.

The company generated an operating margin of 17%, or 11% if you exclude the one-time gain on the sale of a business. Free cash flow totaled $51.8 million, and the company addressed some of its near-term debt maturities by securing a new $1.2 billion secured financing facility.

"Triumph ended our fiscal year 2023 on an upswing," CEO Dan Crowley said in a statement. "As our markets improve, we generated 21% organic sales growth from continuing operations in the quarter."

Now what

Triumph said it expects to grow revenue at between 7% and 10% in its fiscal 2024, setting guidance for full-year sales of between $1.39 billion and $1.43 billion. The consensus estimate is for $1.4 billion in sales.

The company definitely appears to be on the right path, and investors are understandably relieved. But it probably won't be a straight shot up from here. As noted, the guidance for the next 12 months is nothing for investors to get too excited about. And the new financing facility could mean higher interest expense, which could be a drag on earnings in the quarters to come.

Triumph has long been one of the most difficult reclamation projects in aerospace, and to management's credit, the company has gone a long way toward getting its house in order. Investors could see further upside from here, but that will likely require significant patience.