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Meritor (MTOR) Q4 Earnings Surpass Estimates, Improve Y/Y

Zacks Equity Research

Meritor, Inc. MTOR recorded adjusted earnings of 83 cents per share in fourth-quarter fiscal 2019 (ended Sep 30, 2019), which surpassed the Zacks Consensus Estimate of 68 cents. In the year-ago quarter, the bottom line was 82 cents per share. The outperformance resulted from higher-than-anticipated sales at the Aftermarket & Industrial segment.

 

Adjusted income from continuing operations was $70 million compared with $73 million in fourth-quarter fiscal 2018.

 

Sales declined 4.81% year over year to $1.03 billion and missed the Zacks Consensus Estimate of $1.05 billion. The year-over-year decline was led by lower production in India, Europe and China.

 

Meritor’s adjusted EBITDA (earnings before interest, tax, depreciation and amortization) dropped to $116 million from $118 million in the year-ago quarter. Adjusted EBITDA margin was 11.3% compared with 10.9% a year ago on lower net steel, premium and freight costs.

 

Segment Results

 

Revenues at the Commercial Truck & Trailer segment amounted to $728 million in fourth-quarter 2019, down 11% from the year-ago quarter level due to lower production in India, Europe and China. The segment’s adjusted EBITDA fell to $69 million from $74 million in the year-ago quarter. EBITDA margin rose to 9.5% from 9.1% in the prior-year quarter on lower net steel, premium and freight costs.

 

Revenues at the Aftermarket & Industrial segment totaled $341 million, up 11% from the year-ago quarter level, primarily backed by revenues generated from the AxleTech acquisition. The segment’s adjusted EBITDA was $44 million compared with $42 million in the year-ago quarter. EBITDA margin declined to 12.9% from 13.7% in the fourth quarter of fiscal 2018 owing to the AxleTech acquisition which dented margins as certain targeted synergies were not fully realized in the quarter.

 

Meritor, Inc. Price, Consensus and EPS Surprise

 

Meritor, Inc. Price, Consensus and EPS Surprise

Meritor, Inc. price-consensus-eps-surprise-chart | Meritor, Inc. Quote

Financial Position

In the reported quarter, Meritor’s cash and cash equivalents totaled $108 million as of Sep 30, 2019, compared with $115 million as of Sep 30, 2018. Long-term debt was $902 million at the end of the fiscal fourth quarter compared with $730 million at the end of fourth-quarter fiscal 2018. The debt-to-capital ratio was 60.93%, as of Sep 30, 2019.

 

Meritor’s cash inflow from operating activities was $62 million compared with $60 million in the year-ago quarter. During the quarter under review, capital expenditure was $40 million compared with $52 million in the year-ago quarter.

 

Share Repurchase

 

In fiscal 2019, Meritor repurchased 5.3 million shares of common stock for $95 million. The company also approved an increase in the share repurchase authorization from $250 million to $325 million in the year.

 

Fiscal 2020 Outlook

 

In fiscal 2020, Meritor expects sales in the range of $3.7-$3.8 billion. Net income from continuing operations is anticipated in the band of $145-$155 million. Adjusted earnings per share from continuing operations are projected in the range of $2.75-$2.85.

 

Zacks Rank & Stocks to Consider

 

Currently, Meritor has a Zacks Rank #3 (Hold).

 

A few better-ranked stocks in the Auto-Tires-Trucks sector are Spartan Motors, Inc. SPAR, SPX Corporation SPXC and BRP Inc. DOOO, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

Spartan Motors has an estimated earnings growth rate of 85.42% for the ongoing year. The company’s shares have surged 112.8% in a year’s time.

 

SPX has an expected earnings growth rate of 23.18% for 2019. The company’s shares have surged 57.9% in the past year.

 

BRP has a projected earnings growth rate of 18.49% for the current year. Its shares have gained around 27.7% over the past year.

 

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Adjusted income from continuing operations was $70 million compared with $73 million in fourth-quarter fiscal 2018.

Sales declined 4.81% year over year to $1.03 billion and missed the Zacks Consensus Estimate of $1.05 billion. The year-over-year decline was led by lower production in India, Europe and China.

Meritor’s adjusted EBITDA (earnings before interest, tax, depreciation and amortization) dropped to $116 million from $118 million in the year-ago quarter. Adjusted EBITDA margin was 11.3% compared with 10.9% a year ago on lower net steel, premium and freight costs.

Segment Results

Revenues at the Commercial Truck & Trailer segment amounted to $728 million in fourth-quarter 2019, down 11% from the year-ago quarter level due to lower production in India, Europe and China. The segment’s adjusted EBITDA fell to $69 million from $74 million in the year-ago quarter. EBITDA margin rose to 9.5% from 9.1% in the prior-year quarter on lower net steel, premium and freight costs.

Revenues at the Aftermarket & Industrial segment totaled $341 million, up 11% from the year-ago quarter level, primarily backed by revenues generated from the AxleTech acquisition. The segment’s adjusted EBITDA was $44 million compared with $42 million in the year-ago quarter. EBITDA margin declined to 12.9% from 13.7% in the fourth quarter of fiscal 2018 owing to the AxleTech acquisition which dented margins as certain targeted synergies were not fully realized in the quarter.

Meritor, Inc. Price, Consensus and EPS Surprise

Meritor, Inc. Price, Consensus and EPS Surprise

Meritor, Inc. price-consensus-eps-surprise-chart | Meritor, Inc. Quote

Financial Position

In the reported quarter, Meritor’s cash and cash equivalents totaled $108 million as of Sep 30, 2019, compared with $115 million as of Sep 30, 2018. Long-term debt was $902 million at the end of the fiscal fourth quarter compared with $730 million at the end of fourth-quarter fiscal 2018. The debt-to-capital ratio was 60.93%, as of Sep 30, 2019.

Meritor’s cash inflow from operating activities was $62 million compared with $60 million in the year-ago quarter. During the quarter under review, capital expenditure was $40 million compared with $52 million in the year-ago quarter.

Share Repurchase

In fiscal 2019, Meritor repurchased 5.3 million shares of common stock for $95 million. The company also approved an increase in the share repurchase authorization from $250 million to $325 million in the year.

Fiscal 2020 Outlook

In fiscal 2020, Meritor expects sales in the range of $3.7-$3.8 billion. Net income from continuing operations is anticipated in the band of $145-$155 million. Adjusted earnings per share from continuing operations are projected in the range of $2.75-$2.85.

Zacks Rank & Stocks to Consider

Currently, Meritor has a Zacks Rank #3 (Hold).

A few better-ranked stocks in the Auto-Tires-Trucks sector are Spartan Motors, Inc. (SPAR), SPX Corporation (SPXC) and BRP Inc. (DOOO), each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Spartan Motors has an estimated earnings growth rate of 85.42% for the ongoing year. The company’s shares have surged 112.8% in a year’s time.

SPX has an expected earnings growth rate of 23.18% for 2019. The company’s shares have surged 57.9% in the past year.

BRP has a projected earnings growth rate of 18.49% for the current year. Its shares have gained around 27.7% over the past year.

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Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.

This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year. 

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Meritor, Inc. MTOR recorded adjusted earnings of 83 cents per share in fourth-quarter fiscal 2019 (ended Sep 30, 2019), which surpassed the Zacks Consensus Estimate of 68 cents. In the year-ago quarter, the bottom line was 82 cents per share. The outperformance resulted from higher-than-anticipated sales at the Aftermarket & Industrial segment.

 

Adjusted income from continuing operations was $70 million compared with $73 million in fourth-quarter fiscal 2018.

 

Sales declined 4.81% year over year to $1.03 billion and missed the Zacks Consensus Estimate of $1.05 billion. The year-over-year decline was led by lower production in India, Europe and China.

 

Meritor’s adjusted EBITDA (earnings before interest, tax, depreciation and amortization) dropped to $116 million from $118 million in the year-ago quarter. Adjusted EBITDA margin was 11.3% compared with 10.9% a year ago on lower net steel, premium and freight costs.

 

Segment Results

 

Revenues at the Commercial Truck & Trailer segment amounted to $728 million in fourth-quarter 2019, down 11% from the year-ago quarter level due to lower production in India, Europe and China. The segment’s adjusted EBITDA fell to $69 million from $74 million in the year-ago quarter. EBITDA margin rose to 9.5% from 9.1% in the prior-year quarter on lower net steel, premium and freight costs.

 

Revenues at the Aftermarket & Industrial segment totaled $341 million, up 11% from the year-ago quarter level, primarily backed by revenues generated from the AxleTech acquisition. The segment’s adjusted EBITDA was $44 million compared with $42 million in the year-ago quarter. EBITDA margin declined to 12.9% from 13.7% in the fourth quarter of fiscal 2018 owing to the AxleTech acquisition which dented margins as certain targeted synergies were not fully realized in the quarter.

 

CHART

 

Financial Position

 

In the reported quarter, Meritor’s cash and cash equivalents totaled $108 million as of Sep 30, 2019, compared with $115 million as of Sep 30, 2018. Long-term debt was $902 million at the end of the fiscal fourth quarter compared with $730 million at the end of fourth-quarter fiscal 2018. The debt-to-capital ratio was 60.93%, as of Sep 30, 2019.

 

Meritor’s cash inflow from operating activities was $62 million compared with $60 million in the year-ago quarter. During the quarter under review, capital expenditure was $40 million compared with $52 million in the year-ago quarter.

 

Share Repurchase

 

In fiscal 2019, Meritor repurchased 5.3 million shares of common stock for $95 million. The company also approved an increase in the share repurchase authorization from $250 million to $325 million in the year.

 

Fiscal 2020 Outlook

 

In fiscal 2020, Meritor expects sales in the range of $3.7-$3.8 billion. Net income from continuing operations is anticipated in the band of $145-$155 million. Adjusted earnings per share from continuing operations are projected in the range of $2.75-$2.85.

 

Zacks Rank & Stocks to Consider

 

Currently, Meritor has a Zacks Rank #3 (Hold).

 

A few better-ranked stocks in the Auto-Tires-Trucks sector are Spartan Motors, Inc. SPAR, SPX Corporation SPXC and BRP Inc. DOOO, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

Spartan Motors has an estimated earnings growth rate of 85.42% for the ongoing year. The company’s shares have surged 112.8% in a year’s time.

 

SPX has an expected earnings growth rate of 23.18% for 2019. The company’s shares have surged 57.9% in the past year.

 

BRP has a projected earnings growth rate of 18.49% for the current year. Its shares have gained around 27.7% over the past year.

 

Today's Best Stocks from Zacks 

 

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.

 

This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year. 

 

See their latest picks free >>

Meritor, Inc. (MTOR) recorded adjusted earnings of 83 cents per share in fourth-quarter fiscal 2019 (ended Sep 30, 2019), which surpassed the Zacks Consensus Estimate of 68 cents. In the year-ago quarter, the bottom line was 82 cents per share. The outperformance resulted from higher-than-anticipated sales at the Aftermarket & Industrial segment.

Adjusted income from continuing operations was $70 million compared with $73 million in fourth-quarter fiscal 2018.

Sales declined 4.81% year over year to $1.03 billion and missed the Zacks Consensus Estimate of $1.05 billion. The year-over-year decline was led by lower production in India, Europe and China.

Meritor’s adjusted EBITDA (earnings before interest, tax, depreciation and amortization) dropped to $116 million from $118 million in the year-ago quarter. Adjusted EBITDA margin was 11.3% compared with 10.9% a year ago on lower net steel, premium and freight costs.

Segment Results

Revenues at the Commercial Truck & Trailer segment amounted to $728 million in fourth-quarter 2019, down 11% from the year-ago quarter level due to lower production in India, Europe and China. The segment’s adjusted EBITDA fell to $69 million from $74 million in the year-ago quarter. EBITDA margin rose to 9.5% from 9.1% in the prior-year quarter on lower net steel, premium and freight costs.

Revenues at the Aftermarket & Industrial segment totaled $341 million, up 11% from the year-ago quarter level, primarily backed by revenues generated from the AxleTech acquisition. The segment’s adjusted EBITDA was $44 million compared with $42 million in the year-ago quarter. EBITDA margin declined to 12.9% from 13.7% in the fourth quarter of fiscal 2018 owing to the AxleTech acquisition which dented margins as certain targeted synergies were not fully realized in the quarter.

CHART

Financial Position

In the reported quarter, Meritor’s cash and cash equivalents totaled $108 million as of Sep 30, 2019, compared with $115 million as of Sep 30, 2018. Long-term debt was $902 million at the end of the fiscal fourth quarter compared with $730 million at the end of fourth-quarter fiscal 2018. The debt-to-capital ratio was 60.93%, as of Sep 30, 2019.

Meritor’s cash inflow from operating activities was $62 million compared with $60 million in the year-ago quarter. During the quarter under review, capital expenditure was $40 million compared with $52 million in the year-ago quarter.

Share Repurchase

In fiscal 2019, Meritor repurchased 5.3 million shares of common stock for $95 million. The company also approved an increase in the share repurchase authorization from $250 million to $325 million in the year.

Fiscal 2020 Outlook

In fiscal 2020, Meritor expects sales in the range of $3.7-$3.8 billion. Net income from continuing operations is anticipated in the band of $145-$155 million. Adjusted earnings per share from continuing operations are projected in the range of $2.75-$2.85.

Zacks Rank & Stocks to Consider

Currently, Meritor has a Zacks Rank #3 (Hold).

A few better-ranked stocks in the Auto-Tires-Trucks sector are Spartan Motors, Inc. (SPAR), SPX Corporation (SPXC) and BRP Inc. (DOOO), each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Spartan Motors has an estimated earnings growth rate of 85.42% for the ongoing year. The company’s shares have surged 112.8% in a year’s time.

SPX has an expected earnings growth rate of 23.18% for 2019. The company’s shares have surged 57.9% in the past year.

BRP has a projected earnings growth rate of 18.49% for the current year. Its shares have gained around 27.7% over the past year.

Today's Best Stocks from Zacks 

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.

This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year. 

See their latest picks free >>


 


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