Meritor, Inc. is slated to release third-quarter 2020 results on Jul 29, before the opening bell. The Zacks Consensus Estimate for the quarter’s loss is pegged at 47 cents per share on revenues of $486.41 million.
The company delivered better-than-expected results in the last reported quarter on higher-than-anticipated EBITDA (earnings before interest, tax, depreciation and amortization) from the Aftermarket & Industrial segment. Meritor beat estimates in each of the trailing four quarters, the average surprise being 24.93%. This is depicted in the graph below:
Which Way are the Estimates Headed?
The Zacks Consensus Estimate for Meritor’s third-quarter loss per share has been unrevised at 47 cents in the past seven days. This compares unfavorably with the year-ago quarter’s $1.20 per share. The Zacks Consensus Estimate for revenues also suggests a year-over-year plunge of 58.28%.
Key Factors
With the pandemic rattling the auto industry, Meritor is expected to have been affected by the decline in customer demand and the bleak world economy outlook. Its third-quarter performance is likely to have taken a hit due to disruptions across customer and supplier operations, and lower end-market demand. Moreover, the company withdrew the 2020 guidance and suspended its share-buyback program in response to the disruptions to its supply chain due to the coronavirus crisis. Meritor’s sales are expected to have been in the band of $400-$500 million in third quarter of 2020. Cash flow from operations is anticipated in the range of negative $150 million to $225 million in the quarter. This compares unfavourably with the year-ago quarter’s positive cash flow of $143 million.
The Zacks Consensus Estimate for the Commercial Truck & Trailer segment’s quarterly net sales is pegged at $222 million, lower than the year-ago quarter’s $869 million. The EBITDA for the segment is estimated at to be negative $42.8 million, as against the prior year's positive EBITDA of $93 million.
The third-quarter sales estimate for the Aftermarket & Industrial segment is pinned at $222 million, lower than the year-earlier quarter’s $340 million. The distribution segment’s EBITDA estimate is pinned at $21.4 million, suggesting a decrease from the prior-year's $54 million.
Nonetheless, Meritor is focusing on cost-cutting efforts, including substantial staffing adjustments, compensation cuts and marketing cost reduction in the quarter, amid the pandemic. While lower orders amid sluggish freight volumes might have hurt the company’s quarterly performance, solid cost-containment efforts are anticipated to have offered some respite.
What the Zacks Model Says
Our proven model does not conclusively predict an earnings beat for Meritor this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that is not the case here as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: Meritor has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Meritor carries a Zacks Rank of 3 (Hold) currently.
Stocks to Consider
Here are a few stocks worth considering, as these have the right combination of elements to come up with an earnings beat this time around:
O’Reilly Automotive, Inc. (ORLY - Free Report) has an Earnings ESP of +40.19% and carries a Zacks Rank #2 at present. The company is slated to release second-quarter 2020 earnings on Jul 29.
Penske Automotive Group, Inc. (PAG - Free Report) has an Earnings ESP of +207.14% and currently carries a Zacks Rank #3. The company is scheduled to report quarterly numbers on Jul 29.
Group 1 Automotive, Inc. (GPI - Free Report) has an Earnings ESP of +114.82% and carries a Zacks Rank #3 currently. The company is set to announce earnings figures on Jul 30.
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Meritor, Inc. is slated to release third-quarter 2020 results on Jul 29, before the opening bell. The Zacks Consensus Estimate for the quarter’s loss is pegged at 47 cents per share on revenues of $486.41 million.
The company delivered better-than-expected results in the last reported quarter on higher-than-anticipated EBITDA (earnings before interest, tax, depreciation and amortization) from the Aftermarket & Industrial segment. Meritor beat estimates in each of the trailing four quarters, the average surprise being 24.93%. This is depicted in the graph below:
Which Way are the Estimates Headed?
The Zacks Consensus Estimate for Meritor’s third-quarter loss per share has been unrevised at 47 cents in the past seven days. This compares unfavorably with the year-ago quarter’s $1.20 per share. The Zacks Consensus Estimate for revenues also suggests a year-over-year plunge of 58.28%.
Key Factors
With the pandemic rattling the auto industry, Meritor is expected to have been affected by the decline in customer demand and the bleak world economy outlook. Its third-quarter performance is likely to have taken a hit due to disruptions across customer and supplier operations, and lower end-market demand. Moreover, the company withdrew the 2020 guidance and suspended its share-buyback program in response to the disruptions to its supply chain due to the coronavirus crisis. Meritor’s sales are expected to have been in the band of $400-$500 million in third quarter of 2020. Cash flow from operations is anticipated in the range of negative $150 million to $225 million in the quarter. This compares unfavourably with the year-ago quarter’s positive cash flow of $143 million.
The Zacks Consensus Estimate for the Commercial Truck & Trailer segment’s quarterly net sales is pegged at $222 million, lower than the year-ago quarter’s $869 million. The EBITDA for the segment is estimated at to be negative $42.8 million, as against the prior year's positive EBITDA of $93 million.
The third-quarter sales estimate for the Aftermarket & Industrial segment is pinned at $222 million, lower than the year-earlier quarter’s $340 million. The distribution segment’s EBITDA estimate is pinned at $21.4 million, suggesting a decrease from the prior-year's $54 million.
Nonetheless, Meritor is focusing on cost-cutting efforts, including substantial staffing adjustments, compensation cuts and marketing cost reduction in the quarter, amid the pandemic. While lower orders amid sluggish freight volumes might have hurt the company’s quarterly performance, solid cost-containment efforts are anticipated to have offered some respite.
What the Zacks Model Says
Our proven model does not conclusively predict an earnings beat for Meritor this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that is not the case here as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: Meritor has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Meritor carries a Zacks Rank of 3 (Hold) currently.
Stocks to Consider
Here are a few stocks worth considering, as these have the right combination of elements to come up with an earnings beat this time around:
O’Reilly Automotive, Inc. (ORLY - Free Report) has an Earnings ESP of +40.19% and carries a Zacks Rank #2 at present. The company is slated to release second-quarter 2020 earnings on Jul 29.
Penske Automotive Group, Inc. (PAG - Free Report) has an Earnings ESP of +207.14% and currently carries a Zacks Rank #3. The company is scheduled to report quarterly numbers on Jul 29.
Group 1 Automotive, Inc. (GPI - Free Report) has an Earnings ESP of +114.82% and carries a Zacks Rank #3 currently. The company is set to announce earnings figures on Jul 30.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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