Triumph Group Rises Most Since 2011 After CEO Frisby Depart

Updated on

Triumph Group Inc. shares surged the most in more than three years after the aerospace supplier said Chief Executive Officer Jeffry Frisby resigned and a search was under way for his replacement.

Founder Richard Ill will run the manufacturer, best known for producing hulls for Boeing Co.’s 747 jumbo jets, until a permanent CEO is named, the company said in a statement Wednesday. Triumph said it was “the right time to transition leadership” after Frisby had served as CEO since 2012.

The shares rose 8.5 percent to $65.06 in New York, the most since September 2011. Trading volume was more than four times the average over the past three months.

“We’ve spoken to many TGI investors over the last month or so, and a common theme has been criticism that Frisby was best-suited for deal-making and decentralized management,” according to a report by Steven Cahall, a New York-based analyst for RBC Capital Markets, referring to the company by its ticker symbol.

Triumph’s issues “center more around execution on programs like the 747-8” and the transition to a new factory, said Cahall, who rates Triumph sector perform.

He expects the company’s search committee to target executives at industrial companies like United Technologies Corp., General Electric Co. and Precision Castparts Corp. “with track records of operations improvement.”

Frisby has been at Triumph, as president of the Aerospace Systems Group as well as president and CEO, since it acquired Frisby Aerospace Inc. in 1998.

He said in the statement it was a “privilege” to have worked at Triumph.

The abrupt leadership change is “surprising” and “positive,” said Sheila Kahyaoglu, a New York-based analyst with Jefferies LLC who rates Triumph a buy.

The new management team will probably focus on pruning Wayne, Pennsylvania-based Triumph’s sprawling structure, spread across 63 facilities with 12.5 million square feet (1.16 million square meters), she said. Triumph’s revenue of $301 per square foot trails a peer average of $650 and is the lowest among comparable companies tracked by Jefferies.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE