Back to top

Analyst Blog

Meritor Inc. (MTOR - Analyst Report) reported an adjusted loss of $11.0 million or 11 cents per share in the first quarter of fiscal 2013 compared with the prior-year profit of $11.0 million or 12 cents. The EPS missed the Zacks Consensus Estimate of a profit of 4 cents.

On a reported basis, the company posted a net loss of $16.0 million or 17 cents per share in the first quarter of fiscal 2013 compared with a loss of $13.0 million or 13 cents in the corresponding quarter last year.

Revenues went down 23.1% to $891.0 million in the reported quarter, missing the Zacks Consensus Estimate of $939 million. The decline in revenues was due to lower sales volumes in global markets.

Adjusted EBITDA was $46.0 million compared with $79.0 million in the first quarter of fiscal 2012. Adjusted EBITDA margin was 5.2%, down from 6.8% in the year ago quarter. The decrease in EBITDA margin was driven by lower sales, partially offset by the favorable impact of lower material costs, pricing actions in North America and rationalization of European footprint.

Segment Results

Revenues from the Commercial Truck & Industrial segment fell 26.7% to $715.0 million in the reported quarter. Segment EBITDA decreased 44.3% to $34.0 million from $61.0 million in the year-ago quarter, due to lower sales in all regions. EBITDA margin went down to 4.8% from 6.3% in the prior-year quarter.

Revenues from the Aftermarket & Trailer segment decreased 6.9% to $203.0 million, due to lower volumes in North America. Segment EBITDA plummeted 23.5% to $13.0 million from $17.0 million a year ago. EBITDA margin declined to 6.4% from 7.8% in the first quarter of fiscal 2012.

Financial Position

Meritor’s cash and cash equivalents decreased to $139.0 million as of Dec 31, 2012 from $257.0 million as of Sep 30, 2012. Total debt remained flat at $1.1 billion as of Dec 31, 2012 compared with the same as of Sep 30, 2012.

In the first quarter of fiscal 2013, the company had cash outflow of $91.0 million from operating activities compared with a cash flow of $5.0 million in the year-ago period. Capital expenditures declined to $15.0 million from $25.0 million a year ago. The company had free cash outflow from continuing operations of $106.0 million for the quarter compared with $20.0 million last year.


For fiscal 2013, the company expects revenues to be $3.8 billion, lower than the previous guidance of $4.0 billion. Adjusted EBITDA margin is likely to be 7.0% and adjusted earnings per share are expected between 25 cents and 35 cents for the year.

In addition, the company expects capital expenditures between $65.0 million and $75.0 million for the fiscal year. Interest expense is projected in the range of $95.0 million to $105.0 million for the year, higher than the previous estimate of $90 million to $100 million.

Our Take

Headquartered in Troy, Mich., Meritor is a global automotive parts manufacturer and supplier to various customers in 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 its big customers include AB Volvo (VOLVY), Navistar International Corporation (NAV - Analyst Report) and Daimler AG (DDAIF). Currently, Meritor retains a Zacks Rank #3 (Hold).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
CENTURY ALU… CENX 22.53 +4.50%
ERBA DIAGNO… ERB 2.91 +4.30%
PLANAR SYST… PLNR 4.31 +3.86%
MALLINCKROD… MNK 72.17 +3.83%
GTT COMMUNI… GTT 12.06 +3.52%