Triumph Group, Inc. (TGI) commenced an exchange offer of $175 million in aggregate principal amount of its 8% Senior Subordinated Notes due 2017 that are registered under the Securities Act of 1933, for the aggregate same principal amount of its outstanding 8% Senior Subordinated Notes due 2017. The exchange offer will expire on March 16, 2010.
Triumph has also declared a regular quarterly dividend of $0.04 per share on its outstanding common stock, payable on March 15, 2010 to shareholders of record as of March 1, 2010.
The estimate revisions trend is going down. Over the last 30 days, 7 of the 8 analysts covering the stock have downgraded their estimates for 2010, with just one analyst moving in the opposite direction. Thus, the Zacks Consensus Estimate has gone down from $4.99 to $4.79 per share over the last 30 days.
With respect to earnings surprises, Triumph has a mixed track record in the preceding four quarters with two positive and two negative earnings surprises. However, it produced an average positive earnings surprise of 0.53% over the last four quarters, signifying that Triumph has beaten the Zacks Consensus Estimate by that measure over the trailing 12 months. Nevertheless, currently the Zacks Consensus Estimate for full fiscal 2010 earnings is $4.99 per share, which is much below the full fiscal 2009 earnings of $6.05 per share. Triumph has had to deal with tight profit margins in both the aftermarket and OEM level due to stiff competition and low barriers to entry.
Moreover, we do not see any significant recovery in the delivery of new commercial aircraft in the medium term. Huge dependence on government spending and Boeing, its largest customer, is also discouraging. This gets reflected in its current Zacks #4 Rank (Underperform).
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