Triumph Group, Inc. announced that it expects to record pre-tax additional program costs during fiscal year 2014 totaling approximately $68.0 million, or $0.83 per diluted share, primarily associated with the 747-8 program. Of the total incremental costs, approximately $44.0 million, or $0.53 per diluted share, will be included in the company's second quarter fiscal year 2014 financial results.
The company expects that approximately $11.0 million, or $0.14 per diluted share, will be reflected in third quarter fiscal year 2014 and the remaining $13.0 million, or $0.16 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. 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. Jeffry D. Frisby, Triumph's President and Chief Executive Officer, said, "We are disappointed in our recent execution on the 747 program. 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 program 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." Triumph Group, Inc. headquartered in Berwyn, Pennsylvania, designs, engineers, manufactures, repairs and overhauls a broad portfolio of aerostructures, aircraft components, accessories, subassemblies and systems. The company serves a broad, worldwide spectrum of the aviation industry, including original equipment manufacturers of commercial, regional, business and military aircraft and aircraft components, as well as commercial and regional airlines and air cargo carriers.
