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Triumph remains confident despite Boeing 747 cutback

Keywords: Tags  Triumph Group, M. David Kornblatt, Jeffry D. Frisby, Boeing 747, earnings report, Frank Haflich

LOS ANGELES — Triumph Group Inc. said it is prepared for additional cuts in its largest aircraft program even as it maintains confidence in the plane’s long-term future.

M. David Kornblatt, Triumph’s executive vice president and chief financial officer, said a cutback in the monthly build rate of Boeing Co.’s 747 would decrease 2014 earnings by about 10 cents per share, according to a transcript of the company’s quarterly earnings conference call with securities analysts. The Berwyn, Pa.-based producer of aerospace components and systems posted diluted per-share earnings of $1.50 for the three months ended June 30.

Boeing Co. said in April that it would "adjust" the production of its 747-8 commercial transport to 1.75 per month in 2014 from two per month currently as the market for freighters remains slow.

Triumph president and chief executive officer Jeffry D. Frisby said the company has "contingency plans" if the 747 build rate falls further to 1.5 per month, although the company believes the aircraft has "a long future" and shares Boeing’s confidence in the program.

Triumph posted net income of $79.04 million for its fiscal first quarter ended June 30, up 3.5 percent from $76.33 million in the same period a year earlier on sales that rose 6.3 percent to $943.68 million.

Boeing accounted for 45 percent of Triumph’s business in the quarter, Kornblatt said. After the 747, Triumph’s next-largest programs in terms of backlog are the Boeing 777, Boeing C-17 military transport, Gulfstream 450 and 550 business jets, and Boeing 787 and 737 airliners.

Frisby said there’s "no shortage" of acquisition opportunities, and Triumph hopes to "get some deals done" this year.

In May, it acquired the Primus Composites operation of Portland, Ore.-based Precision Castparts Corp., which has operations in Thailand and the United Kingdom. The deal is expected to add about $55 million in annual sales, primarily related to aircraft built by France’s Airbus SAS. In March, Triumph acquired the pump and engine control business of Goodrich Corp., West Hartford, Conn., which is expected to bring to bring about $195 million in annual sales.

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