Meritor Beats on Q4 Earnings, Lags Revs - Analyst Blog
15 November 2013 - 1:00AM
Zacks
Meritor Inc.’s (MTOR) adjusted income dropped
to $11 million or 11 cents per share in the fourth quarter of
fiscal 2013 from $31 million or 32 cents in the year-ago quarter.
However, earnings per share surpassed the Zacks Consensus Estimate
of 8 cents.
Meritor posted a net profit of $41 million or 42 cents per share
in the fourth quarter of fiscal 2013 compared with $5 million or 5
cents in the corresponding quarter last year.
Revenues fell 8% year on year to $909 million and also missed
the Zacks Consensus Estimate of $955 million. Lower sales in the
military business can be held accountable for the decline in
revenues. Moreover, lower revenues from North America, India and
China offset the increase in revenues from Europe and South
America.
Adjusted EBITDA of Meritor declined to $70 million compared with
$79 million in the fourth quarter of fiscal 2012 due to lower
sales. Meanwhile, adjusted EBITDA margin was 7.7% compared with 8%
in the year-ago quarter.
Fiscal 2013
Meritor reported earnings of $39 million or 40 cents per share
for fiscal 2013, down from $111 million or $1.14 per share last
year. Earnings per share surpassed the Zacks Consensus Estimate of
37 cents.
Net loss on a reported basis contracted to $22 million from $52
million in the last year. Meritor’s revenues went down 16% to $3.7
billion in fiscal 2013 from $4.4 billion a year ago mainly due to
lower global sales.
Segment Results
Revenues from the Commercial Truck &
Industrial segment fell 9.6% to $709
million in the reported quarter as the military business registered
lower sales. Segment EBITDA decreased 14% to $54 million from $63
million in the year-ago quarter due to reduced sales. EBITDA margin
fell to 7.6% from 8% in the prior-year quarter due to lower
volumes, partially offset by material and structural cost
reductions.
Revenues from the Aftermarket & Trailer
segment decreased 0.9% to $233 million. Segment
EBITDA increased 33% to $24 million from $18 million a year ago.
EBITDA margin improved to 10.3% from 7.8% in the fourth quarter of
fiscal 2012, driven by better pricing actions in North America and
a decline in material and structural costs.
Financial Position
Meritor’s cash and cash equivalents increased to $318 million as
of Sep 30, 2013 from $257 million as of Sep 30, 2012. Total debt
increased to $1.14 billion as of Sep 30, 2013 from $1.06 billion as
of Sep 30, 2012.
In fiscal 2013, Meritor had cash outflow of $96 million from
operating activities compared with cash inflow of $77 million in
fiscal 2012. Capital expenditures declined to $54 million from $89
million a year ago. Meritor had free cash outflow of $150 million
in the period compared with $12 million in fiscal 2012.
Outlook
For fiscal 2014, Meritor expects revenues of $3.7 billion.
Adjusted EBITDA margin is likely to be 7.5% and adjusted earnings
from continuing operations are expected between 30 cents and 40
cents per share.
In addition, Meritor expects capital expenditures between $80
million and $90 million for the fiscal year. Interest expense is
projected to be $105-$115 million.
Further, Meritor received incremental business worth $120
million during fiscal 2013. This business is expected to boost
earnings from fiscal 2016.
Headquartered in Troy, Michigan, Meritor is a global automotive
parts manufacturer and supplier to North America, Europe and other
parts of the world. The company operates manufacturing facilities
in North America, South America, Europe and Asia-Pacific.
Some of Meritor’s major customers include AB
Volvo (VOLVY), Navistar International
Corporation (NAV) and Daimler AG (DDAIF).
Meritor retains a Zacks Rank #3 (Hold).
DAIMLER AG (DDAIF): Get Free Report
MERITOR INC (MTOR): Free Stock Analysis Report
NAVISTAR INTL (NAV): Free Stock Analysis Report
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