Zacks_Analysts' Blog : Triumph Announces Public Offering - Analyst Blog

Triumph Group, Inc. (TGI) recently announced a public offering of 5,000,000 shares of its common stock, offered by investment funds and other entities associated with The Carlyle Group. The offering is expected to close and settle on November 14, 2011.

Morgan Stanley & Co. LLC is acting as the sole underwriter for the offering, upon completion of which the investment funds associated with The Carlyle Group will own approximately 9.5% of the company’s common stock.

Of late, the company reported encouraging results for the second quarter of fiscal 2012 with $1.13 per diluted share, up from 84 cents in the year-ago quarter and 2.9% y/y rise in net sales. The improved result was driven by significant operating income growth and operating margin expansion generated in the Aerospace Systems segment as well as Aerostructures segment.

Triumph Group bears a favorable outlook for fiscal 2012, expecting to boost current production rates and anticipating earnings per share from continuing operations to be approximately $4.50 per diluted share, excluding integration costs. The company’s recently acquired Aviation Network Services, LLC business is expected to add approximately $3.0 million of revenue for the company.

Moreover, the improving air transport industry indicates a promising demand scenario for the company’s products, equipments and methods of repair and overhaul services; thereby improving results going forward.

Based in Wayne, Pennsylvania, Triumph Group offers a variety of products and services to the aerospace industry. The company serves commercial and regional airlines, air cargo carriers, as well as OEMs of commercial, regional, business and military aircrafts. It faces stiff competition from its peers, such as AAR Corp. (AIR) and Goodrich Corp. (GR).

We currently maintain a long-term Neutral recommendation on the stock. Triumph Group holds a Zacks #2 Rank, which translates into a short-term Buy rating (1-3 months).