TriMas Q2 Earnings Miss Estimates, Revenues Rise Y/Y

TriMas Corporation TRS reported second-quarter 2024 adjusted earnings per share of 43 cents (including non-cash compensation expenses), which missed the Zacks Consensus Estimate of 53 cents. The bottom line declined 23.2% from the prior-year quarter.

Including the impacts of one-time items, the company reported an EPS of 27 cents compared with the year-ago quarter's 26 cents.

The company's revenues increased 3.1% year over year to $241 million. Organic sales growth in packaging and aerospace product lines helped offset lower market demand for products used in some industrial, and oil and gas applications in the Specialty Products segment. The top line beat the Zacks Consensus Estimate of $232 million.

Overall, organic sales improved 2.8% in the quarter. Contribution from acquisitions to sales was 0.6% in the quarter.

Costs & Margins

The cost of sales rose 4.4% year over year to $186.5 million in the reported quarter. Gross profit declined 1% year over year to $54 million. The gross margin was 22.5% compared with 23.4% in the prior-year quarter.

Selling, general and administrative expenses rose 4.9% year over year to $36 million. Adjusted operating profit declined 24% year over year to $21 million. The adjusted operating margin contracted to 8.6% from the prior-year quarter's 11.8%.

Segment Performances

Packaging: Net sales came in at $132 million compared with the year-ago quarter's $117 million. The upside was driven by organic growth within the personal care, beauty and industrial end markets.

The revenue figure was higher than our estimate of $126 million. Organic sales rose 13% year over year. Adjusted operating profit plunged 15.9% year over year to $18.5 million in the reported quarter. We had projected the segment's adjusted operating profit at $22 million.

Aerospace: Net sales increased 30% year over year to $78 million, attributed to increased production efficiencies and commercial actions. The figure surpassed our estimate of $67 million. Organic sales rose 27.6%.

The segment reported an adjusted operating profit of $10.5 million, marking a substantial jump from the year-ago quarter's $3.7 million, driven by the company's operational excellence initiatives and higher conversion rates. We had projected the segment's adjusted operating profit at $7.5 million.

Specialty Products: The segment's revenues decreased 45% year over year to $31 million due to lower demand. Revenues were lower than our estimate of $39 million. Operating profit fell 95.2% year over year to $0.58 million.

Financial Performance

In the first six months of 2024, TriMas repurchased approximately 671,937 of its outstanding common stock for $16.9 million. The company generated $18.4 million of adjusted cash flow from operations in the quarter under review compared with $16.5 million in the prior-year quarter.

TRS ended the quarter with $35 million of cash on hand compared to $34.8 million reported at the end of 2023. The company had $232.5 million of cash and available borrowing capacity under its revolving credit facility. As of Jun 30, 2024, the total debt was $427 million compared with $396 million as of Dec 31, 2023.

2024 Guidance

TriMas lowered its guidance for 2024, anticipating a decline in sales in the Specialty Products segment. The company expects an adjusted EPS of $1.70-$1.90, down from the previously stated $1.95 to $2.15.

Price Performance

TRS shares have declined 5.5% in the past year against the industry's 24.8% growth.

Image Source: Zacks Investment Research

Zacks Rank

TriMas carries a Zacks Rank #2 (Buy) at present.

Peer Performances

The Timken Company TKR reported an adjusted EPS of $1.63 in second-quarter 2024, beating the Zacks Consensus Estimate of $1.60. The bottom line declined 19% year over year from $2.01 in the year-ago quarter.

Timken's revenues in the quarter were $1.18 billion, down 7.1% from the year-ago quarter. The figure was in line with the consensus estimate.

Kaiser Aluminum KALU reported second-quarter adjusted EPS of 65 cents, which missed the Zacks Consensus Estimate of 94 cents. The bottom-line figure fell 48% from the year-ago quarter.

Net sales of KALU declined 5% year over year to $773 million and missed the consensus estimate of $793 million. 

Northwest Pipe Co. NWPX came out with second-quarter earnings of 86 cents per share, beating the Zacks Consensus Estimate of 67 cents per share. This compares with earnings of 74 cents per share a year ago. 

Northwest Pipe posted revenues of $129 million for the quarter ended June 2024, surpassing the Zacks Consensus Estimate of $120 million. The top line increased 12.1% year over year.

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