Meritor Turnaround Puts Company Back In The Black
NEW YORK, NY — OEM component supplier Meritor has posted profits through the first two fiscal quarters this year after 2013 resulted in losses.
Overall, sales were up $54 million compared to the same period in 2013 — a six-percent sales gain, bumping the sales total to $962 million. The increased revenue produced a $1 million net profit through the first half of the year.
The increase was primarily due to higher commercial truck production in North America and Europe, according to the company.
Meritor Chairman, CEO and President Ike Evans expects profits to continue climbing.
"With our strong execution in the first half of the fiscal year and the anticipated strength in the North American market for Class 8 trucks, we've raised our full-year guidance for revenue, adjusted earnings before interest, taxes, depreciation, and amortization margin and adjusted earnings per share," Evans said.
Evans is staying realistic, however, citing a mild commercial truck market softness in Europe, South America and India as potential inhibitors to continuing Meritor’s growth trends.
Even so, Meritor is changing their expectations because of the better-than-expected numbers. Last year, the company's profits suffered from damaging foreign currency exchange rates and a pension settlement loss, resulting in a $38 million loss in the second quarter of 2013.
The growth comes from increased sales to commercial truck companies and aftermarket and trailer companies. The former went up $51 million over the same period in 2013 to $762 million, while the latter increased by $8 million to $232 million.
Going into 2014, Meritor projected overall revenues of about $3.7 billion. That number is now expected to be between $3.75 and $3.8 billion, while earnings per share from continuing operations are up to 50-60 cents from the initial range of 30-40 cents.