Triumph Aerostructures-Vought Aircraft Division, subsidiary of Triumph Group Inc. (TGI), has been chosen to be a part of The Boeing Company’s (BA) NewGen Tanker Team for the U.S. Air Force KC-X program. Triumph will provide horizontal stabilizer and aft body sections, wing center section, doors, skin panel fabrication, assemblies, keelbeams, seal depressor and acoustic panels for the NewGen Tanker.
 
Triumph will also supply landing gear and wing structures, push-pull cables, actuators, floor panels, interiors and insulation blankets for the NewGen Tanker.
 
Triumph Aerostructures-Vought Aircraft Division is a new division formed after the acquisition of Vought Aircraft Industries Inc. from a private equity firm, The Carlyle Group, for $1.44 billion. Vought’s acquisition was highly accretive to earnings with a contribution of approximately 10 cents per share, excluding transaction and integration expenses, to $1.33 per share recorded in the first quarter of fiscal 2011.
 
We increased our EPS estimates for fiscal years 2011 and 2012 to $6.06 per share and $7.21 per share, respectively, after taking into account the synergy benefits that would accrue within a year. Management too has raised the fiscal 2011 EPS guidance to approximately $6.00. The acquisition is expected to add approximately $1.10 to the earnings estimate.
 
Triumph Group has grown significantly over the past decade due to overall growth in the aerospace equipment and repair market, augmented by a string of more than 30 acquisitions. Triumph is all set to achieve $1.5 billion in annual sales and has been moving toward its goal through acquisitions.
 
The company has witnessed its sales increase by more than $300 million in the last three years through various acquisitions. We expect to see continued merger and acquisition activity in order to reach its $1.5 billion annual sales goal. However, based on the stiff competition and the present slow market movement, the stock currently retains its short term “Hold” rating, equivalent to Zacks #3 Rank.
 
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