Meritor (MTOR) Tops Q1 EPS by 8c, Revenues Miss; Offers FY20 EPS/Revenue Guidance Below Consensus

Meritor (NYSE: MTOR) reported Q1 EPS of $0.64, $0.08 better than the analyst estimate of $0.56. Revenue for the quarter came in at $901 million versus the consensus estimate of $928.72 million.

First-Quarter Highlights

• Sales of $901 million
• Net income attributable to Meritor and net income from continuing operations attributable to Meritor were each $39 million
• Diluted earnings per share from continuing operations of $0.48
• Adjusted income from continuing operations attributable to the company of $52 million, or $0.64 per adjusted diluted share
• Adjusted EBITDA of $98 million and adjusted EBITDA margin of 10.9 percent
• Repurchased 4.9 million shares for $100 million

GUIDANCE:

Meritor sees FY2020 EPS of $2.75-$2.85, versus the consensus of $2.87. Meritor sees FY2020 revenue of $3.7-3.8 billion, versus the consensus of $3.83 billion.

Outlook for Fiscal Year 2020 The company is revising its guidance from its prior outlook for fiscal year 2020 due to weakening end markets globally:

• Revenue to be approximately $3.7 billion compared to the prior outlook of $3.7 billion to $3.8 billion
• Net income attributable to Meritor and net income from continuing operations attributable to Meritor to be approximately $150 million compared to the prior outlook of $145 million to $155 million
• Diluted earnings per share from continuing operations to be approximately $2.00 compared to the prior outlook of $1.95 to $2.05
• Adjusted diluted earnings per share from continuing operations to be approximately $2.75 compared to the prior outlook of $2.75 to $2.85
• Adjusted EBITDA margin to be approximately 11.0 percent compared to the prior outlook of 11.0 percent to 11.2 percent
• Operating cash flow to be approximately $280 million compared to the prior outlook of $280 million to $290 million
• Free cash flow to be approximately $165 million compared to the prior outlook of $165 million to $175 million

"Overall, this was a solid quarter for us, even as we managed declining production volumes in our global end markets," said Jay Craig, CEO and president of Meritor. "We are driving strong operational performance, executing our share repurchase plan and winning meaningful new business, as demonstrated by the electrification award we announced from PACCAR this quarter."

For earnings history and earnings-related data on Meritor (MTOR) click here.

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