Please ensure Javascript is enabled for purposes of website accessibility

Shares of Triumph Group Pop 10% Despite Missing Earnings Estimates

By Daniel Miller - May 4, 2016 at 1:13PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Triumph beats estimates on the top line, but misses on the bottom line; shares move higher on plan to improve operations.


Graphic source: Triumph Group's JP Morgan Aviation, Transportation & Industrials Conference presentation.

What: Shares of Triumph Group (TGI 2.10%), a global leader in manufacturing and overhauling aerospace structures, systems, and components, are flying about 10% higher after the company announced its fourth-quarter and full-year fiscal 2016 results.

So what: Looking at Triumph Group's top-line results, its revenue checked in at $1.06 billion during the quarter, which topped analysts' estimates of $1.01 billion. However, after reporting a profit during the same time period a year ago, Triumph Group's fourth-quarter loss checked in at $1.08 billion. In other words, it lost $21.93 per share during the fourth-quarter; but when adjusted for non-recurring costs, the company posted earnings of $1.32 per share -- which was below analysts' estimates of $1.49.

Despite missing bottom-line estimates, investors are apparently happy with the company completing its comprehensive review of operations, which focused on improving operational performance, identifying organic growth, and improving the facility footprint.

As an example, Triumph's business segment reporting is now more simple: what was three segments with six operating VPs is now four segments with four corresponding executive VPs. Further, it reduced the number of operating companies from 47 to 22, eliminating overlaps, and increasing the scale of combined companies.

Now what: Daniel J. Crowley, Triumph's President and Chief Executive Officer, said in a press release:

Our actions to simplify our company and operate as One Triumph Team reflect a commitment to our shareholders, customers and employees to sharpen Triumph's focus, improve performance, generate organic growth and deliver predictable profitability. We are moving immediately to begin realizing the benefits of our transformation strategy. We expect improved performance in fiscal year 2017 and follow through in fiscal years 2018 and 2019.

It's been a bumpy ride for investors during the past year, with shares down 5.4% year to date, and down 36% during the past 12 months. However, today's 10% pop suggests that investors are at least buying into the company's plan to improve operations.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Triumph Group, Inc. Stock Quote
Triumph Group, Inc.
TGI
$13.15 (2.10%) $0.27

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
332%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.