Meritor, Inc. posted adjusted earnings per share of 80 cents in first-quarter fiscal 2022, increasing 33.3% from 60 cents in the year-ago quarter. The metric also beat the Zacks Consensus Estimate of 75 cents on higher-than-expected revenues from the Commercial Truck & Trailer segment. Adjusted income from continuing operations was $57 million in the reported quarter, increasing from $43 million recorded in the prior-year quarter.
Sales grew 11% year over year to $984 million in the fiscal first quarter. The top line, however, missed the Zacks Consensus Estimate of $1,002 million.
Adjusted EBITDA went up to $113 million from the year-earlier quarter’s $102 million. The upside stemmed from higher sales volumes, partially offset by higher steel costs. Adjusted EBITDA margin remained flat at 11.5%.
Segment Results
In the reported quarter, revenues from the Commercial Truck & Trailer segment amounted to $785 million, growing 14% year over year on higher global truck production in all markets. The figure also topped the Zacks Consensus Estimate of $773 million. The segment reported an adjusted EBITDA of $69 million, rising from $63 million witnessed in the year-ago quarter. The figure, however, missed the consensus mark of $73 million. EBITDA margin came in at 8.8% during the quarter, down from 9.1%.
Quarterly revenues in the Aftermarket & Industrial segment totaled $241 million, up 3% from the year-ago level on higher pricing in the quarter. The revenue figure, however, missed the Zacks Consensus Estimate of $264 million. The segment’s adjusted EBITDA was $38 million, an increase of $3 million from the year-ago quarter. The figure narrowly missed the consensus mark of $38.28 million. EBITDA margin came in at 15.8%, up from 15% recorded in the prior-year quarter, primarily due to cost savings from the footprint optimization restructuring initiatives.
Financial Position
In the reported quarter, Meritor’s cash and cash equivalents summed $113 million as of Dec 31, 2021, falling from $283 million as of Dec 31, 2020. Long-term debt was $1,027 million at the end of the quarter, up from $1,008 million reported in the fourth quarter of fiscal 2021.
During the fiscal first quarter, Meritor’s cash used from operating activities was $21 million against $44 million of cash provided by operating activities in the year-ago quarter.
Free cash flow (FCF) in the reported quarter was a negative $39 million against a positive FCF of $34 million recorded in the same period last year. In the quarter ended Dec 31, 2021, capital expenditure was $18 million compared with the $10 million incurred in the year-ago quarter.
Fiscal 2022 Outlook Reiterated
For fiscal 2022, Meritor’s guidance remains the same. Sales are projected in the range of $4.1-$4.3 billion. The company projects adjusted earnings per share to be in the band of $3.25-$3.75. Cash flow from operations is anticipated in the range of $275-$320 million and free cash flow in the band of $175-$200 million.
Zacks Rank & Key Picks
Currently, Meritor has a Zacks Rank #3 (Hold).
Some better-ranked players in the auto space are Goodyear Tire (GT - Free Report) and Tesla (TSLA - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) and Genuine Parts (GPC - Free Report) , carrying a Zacks Rank #2 (Buy) currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
Goodyear has an expected earnings growth rate of 51.7% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 1.1% upward over the past 60 days.
Goodyear’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. GT pulled off a trailing four-quarter earnings surprise of 228.5%, on average. The stock has also rallied 67% over a year.
Tesla has an expected earnings growth rate of 35.21% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 5% upward over the past 60 days.
Tesla’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters. TSLA pulled off a trailing four-quarter earnings surprise of 25.38%, on average. The stock has also rallied 4.6% over a year.
Genuine Parts has an expected earnings growth rate of 10.61% for the current year. The Zacks Consensus Estimate for earnings for the current year has been revised around 2.5% upward over the past 60 days.
Genuine Parts’ earnings beat the Zacks Consensus Estimate in all the trailing four quarters. GPC pulled off a trailing four-quarter earnings surprise of around 16%, on average. The stock has also rallied 30.6% over a year.
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Meritor, Inc. posted adjusted earnings per share of 80 cents in first-quarter fiscal 2022, increasing 33.3% from 60 cents in the year-ago quarter. The metric also beat the Zacks Consensus Estimate of 75 cents on higher-than-expected revenues from the Commercial Truck & Trailer segment. Adjusted income from continuing operations was $57 million in the reported quarter, increasing from $43 million recorded in the prior-year quarter.
Sales grew 11% year over year to $984 million in the fiscal first quarter. The top line, however, missed the Zacks Consensus Estimate of $1,002 million.
Adjusted EBITDA went up to $113 million from the year-earlier quarter’s $102 million. The upside stemmed from higher sales volumes, partially offset by higher steel costs. Adjusted EBITDA margin remained flat at 11.5%.
Segment Results
In the reported quarter, revenues from the Commercial Truck & Trailer segment amounted to $785 million, growing 14% year over year on higher global truck production in all markets. The figure also topped the Zacks Consensus Estimate of $773 million. The segment reported an adjusted EBITDA of $69 million, rising from $63 million witnessed in the year-ago quarter. The figure, however, missed the consensus mark of $73 million. EBITDA margin came in at 8.8% during the quarter, down from 9.1%.
Quarterly revenues in the Aftermarket & Industrial segment totaled $241 million, up 3% from the year-ago level on higher pricing in the quarter. The revenue figure, however, missed the Zacks Consensus Estimate of $264 million. The segment’s adjusted EBITDA was $38 million, an increase of $3 million from the year-ago quarter. The figure narrowly missed the consensus mark of $38.28 million. EBITDA margin came in at 15.8%, up from 15% recorded in the prior-year quarter, primarily due to cost savings from the footprint optimization restructuring initiatives.
Financial Position
In the reported quarter, Meritor’s cash and cash equivalents summed $113 million as of Dec 31, 2021, falling from $283 million as of Dec 31, 2020. Long-term debt was $1,027 million at the end of the quarter, up from $1,008 million reported in the fourth quarter of fiscal 2021.
During the fiscal first quarter, Meritor’s cash used from operating activities was $21 million against $44 million of cash provided by operating activities in the year-ago quarter.
Free cash flow (FCF) in the reported quarter was a negative $39 million against a positive FCF of $34 million recorded in the same period last year. In the quarter ended Dec 31, 2021, capital expenditure was $18 million compared with the $10 million incurred in the year-ago quarter.
Fiscal 2022 Outlook Reiterated
For fiscal 2022, Meritor’s guidance remains the same. Sales are projected in the range of $4.1-$4.3 billion. The company projects adjusted earnings per share to be in the band of $3.25-$3.75. Cash flow from operations is anticipated in the range of $275-$320 million and free cash flow in the band of $175-$200 million.
Zacks Rank & Key Picks
Currently, Meritor has a Zacks Rank #3 (Hold).
Some better-ranked players in the auto space are Goodyear Tire (GT - Free Report) and Tesla (TSLA - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) and Genuine Parts (GPC - Free Report) , carrying a Zacks Rank #2 (Buy) currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
Goodyear has an expected earnings growth rate of 51.7% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 1.1% upward over the past 60 days.
Goodyear’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. GT pulled off a trailing four-quarter earnings surprise of 228.5%, on average. The stock has also rallied 67% over a year.
Tesla has an expected earnings growth rate of 35.21% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 5% upward over the past 60 days.
Tesla’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters. TSLA pulled off a trailing four-quarter earnings surprise of 25.38%, on average. The stock has also rallied 4.6% over a year.
Genuine Parts has an expected earnings growth rate of 10.61% for the current year. The Zacks Consensus Estimate for earnings for the current year has been revised around 2.5% upward over the past 60 days.
Genuine Parts’ earnings beat the Zacks Consensus Estimate in all the trailing four quarters. GPC pulled off a trailing four-quarter earnings surprise of around 16%, on average. The stock has also rallied 30.6% over a year.
Free Report – The Bitcoin Profit Phenomenon
Zacks Investment Research has released a Special Report to help you pursue massive profits from the world’s first and largest decentralized form of money.
No guarantees for the future, but in the past three presidential election years, Bitcoin’s returns were as follows: 2012 +272.4%, 2016 +161.1%, and 2020 +302.8%.
Zacks predicts another significant surge. Click below for Bitcoin: A Tumultuous Yet Resilient History.
Download Now – Today It’s FREE >>
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