) reported adjusted earnings per share of 32 cents in the fourth
quarter of 2012, down 28.9% from 45 cents in the year-ago
quarter. However, quarterly earnings outpaced the Zacks Consensus
Estimate by 14 cents per share. Net income decreased 27.9% to
$31.0 million from $43.0 million in the fourth quarter of 2011.
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Meanwhile, on a reported basis, net income deteriorated
significantly to $4.0 million or 4 cents per share in the fourth
quarter of 2012 from $38.0 million or 40 cents in the
corresponding quarter last year. The year-over-year fall in
earnings was attributable to lower earnings from unconsolidated
affiliates resulting from a decline in sales volume in the
Revenues went down 19% to $986.0 million in the reported quarter,
missing the Zacks Consensus Estimate of $1.0 billion. The decline
in revenues was due to lower sales volumes in global markets and
adverse impacts of currency translation.
Adjusted EBITDA was $79.0 million compared with $97.0 million in
the fourth quarter of fiscal 2011. Meanwhile, adjusted EBITDA
margin was flat year over year at 8.0%. EBITDA margin was
positively affected by favorable pricing in North America,
rationalization in Europe and improved military mix, which offset
the adverse impact of lower sales volume.
Revenues from the
segment fell 24.1% to $583.0 million in the reported quarter, due
to lower sales volume. Segment EBITDA decreased 6.1% to $46.0
million in the quarter. However, EBITDA margin increased to 7.9%
from 6.4% in the prior-year quarter, which was attributable to
favorable pricing in North America, rationalization in Europe and
improved net material performance; partially offset by lower
sales volumes and poor earnings from the unconsolidated Brakes
affiliate in Brazil.
Revenues from the
segment declined 17.5% to $222.0 million due to lower sales
volume in both China and India. Segment EBITDA was $15.0 million
compared with $18.0 million in the year-ago quarter. However,
EBITDA margin improved marginally to 6.8% from 6.7% a year ago.
Margins were impacted positively by improved military mix, which
was offset by adverse impact of lower sales volume in China.
Revenues from the
Aftermarket & Trailer
segment decreased 9.5% to $248.0 million, due to lower
aftermarket volumes and adverse impacts of currency translation.
Segment EBITDA plummeted 37.5% to $20.0 million from $32.0
million in the fourth quarter of fiscal 2011. EBITDA margin
declined to 8.1% from 11.7%, due to lower sales volume in
European and North American markets.
Fiscal 2012 Performance
Meritor posted a 34.1% rise in earnings to $1.14 per share in
fiscal 2012 from 85 cents per share in fiscal 2011. Profits went
up 35.4% to $111.0 million from $82.0 million in the year-ago
Revenues declined 4.4% year over year to $4.4 billion, due to
lower sales volumes in global markets and adverse impacts of
Meritor's cash and cash equivalents rose to $257.0 million as of
September 30, 2012 from $217.0 million as of September 30, 2011.
Total debt increased to $1.06 billion from $1.03 billion as of
September 30, 2011.
In fiscal 2012, the company generated cash flow from operating
activities of $77.0 million, up from $41.0 million in the
year-ago period. The year-over-year growth in cash flow was
driven by lower working capital and a decrease in cash used for
discontinued operations. Capital expenditures declined to $89.0
million from $105.0 million a year ago. The company had lower
free cash outflow from continuing operations of $12.0 million for
the year compared with $70.0 million last year.
For fiscal 2013, the company expects revenues to be $4.0 billion
and adjusted EBITDA margin of 7.0%. The company also anticipates
adjusted earnings per share between 25 cents and 35 cents for the
In addition, the company expects capital expenditures between
$65.0 million and $75.0 million for the fiscal year. Tax rate is
estimated to be 50% and interest expense is projected in the
range of $90.0 million to $100.0 million for the year.
Headquartered in Troy, Michigan, 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
Navistar International Corporation
). Currently, it retains a Zacks #4 Rank, which translates into a
short-term (1 to 3 months) Sell rating.