Triumph Group’s sales rose 14.1% annually to $327.1 million in its fiscal 2024 first quarter (Q1), driven by its strength in the aftermarket, though the aerospace supplier lost $12.8 million, or $0.19 per share.
Among Triumph’s business lines, commercial aftermarket performed the best, with an annual increase of 38.7% to $24.5 million on the back of continued improvement in overall air travel metrics, which favorably impacted both repair and overhaul services and spare part sales on an equal basis.
“Our sales mix change towards more aftermarket is having a positive impact on margins and cash flow,” Chief Financial Officer Jim McCabe said in an earnings call, adding that in the April to June quarter, total aftermarket sales represented 41% of the company’s revenue, up from 33% a year earlier.
However, military aftermarket sales fell 6.6% to $3.3 million amid reduced demand for fixed-wing platforms and fewer spares on rotorcraft.
That said, after a period of deferred maintenance during the pandemic, Triumph’s MRO inductions have risen steadily, including 15% in the April to June period. As worldwide and U.S. defense procurement spending grows for aircraft, ships and ordnance, Triumph has reached its target of 35% of sales coming from military programs, up from 20% in 2016—and across a broader set of customers, CEO Daniel J. Crowley said in the Aug. 2 earnings call.
He expressed optimism about the company’s involvement in commercial aviation’s growing sustainability efforts. “We are deeply engaged in the next-gen aircraft propulsion pursuits with multiple aircraft and engine OEMs,” Crowley said. “From gearboxes for electric vehicle transmissions, the landing gear systems, thermal support and electric actuation, Triumph continues to be a key design partner in these future more sustainable aircraft, strengthening our position in the marketplace.”
With regards to Triumph’s work with GE, its No. 3 customer, Crowley said that “the partnership with GE continues to strengthen. And we’ve been engaging on both the commercial and the military side.”
Noting that there is funding for an alternate engine that would go not only in the F-35, but also other military platforms, Crowley said that GE has brought in Triumph to help with things like the afterburner fuel pump and fueldraulic actuators.
“They continue to ask us to come in with our chief engineer for that product line and meet with theirs. And it’s encouraging because they’re not looking at other sources. We’re the primary sources that they’re engaging,” he said.
Further, after the Paris Air Show, Triumph signed an agreement with Honeywell to be its provider of engine controls for all its next-generation APUs, Crowley added.
Looking ahead, Triumph expects to achieve its full-year guidance and deliver profitable growth in 2023, company executives said.
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