Triumph Group expects FY2014 additional programme costs

Triumph Group announced (18-Sep-2013) that it expects to record pre-tax additional programme costs during fiscal year 2014 totalling approximately USD68.0 million, or USD0.83 per diluted share, primarily associated with the Boeing 747-8 programme. Of the total incremental costs, approximately USD44.0 million, or USD0.53 per diluted share, will be included in the company's second quarter fiscal year 2014 financial results. The company expects that approximately USD11.0 million, or USD0.14 per diluted share, will be reflected in third quarter fiscal year 2014 and the remaining USD13.0 million, or USD0.16 per diluted share, will be included in the fourth quarter fiscal year 2014 financial results. The number of shares used in computing diluted earnings per share was approximately 53.0 million shares. The company said that these amounts have "resulted from reductions to the profitability estimates of the company's current 747-8 production lot, which will be approximately 80% completed by the end of the company's second quarter fiscal year 2014 and is expected to be nearly 100% completed by the end of the third quarter fiscal year 2014". As a result of the current cost levels, the expected profitability on the next production lot, which will begin delivery in the fourth quarter of fiscal year 2014, was also decreased. Both current and future production lots are expected to be profitable and not result in loss reserves. Triumph president and CEO Jeffry D Frisby said, "We are disappointed in our recent execution on the 747 programme. In addition to a new leadership team, we have already taken several actions, including the development of a detailed game plan to reduce cost and improve quality and on-time delivery in a sustainable way. As we move forward, we are confident that we will be able to return the 747-8 programme to our expected level of execution and profitability and we remain confident that our business model will provide for sustainable long-term growth for Triumph Group as a whole." [more - original PR]