Meritor (MTOR) Tops Q2 EPS by 28c, Revenues Beat; Offers 3Q Revenue Guidance Below Consensus

Meritor (NYSE: MTOR) reported Q2 EPS of $0.74, $0.28 better than the analyst estimate of $0.46. Revenue for the quarter came in at $871 million versus the consensus estimate of $862.3 million.

Second-Quarter Highlights

• Sales of $871 million
• Net income attributable to Meritor was $241 million and net income from continuing operations attributable to Meritor was $240 million
• Diluted earnings per share from continuing operations of $3.19
• Adjusted income from continuing operations attributable to the company of $56 million, or $0.74 per adjusted diluted share
• Adjusted EBITDA of $107 million and adjusted EBITDA margin of 12.3 percent
• Received $265 million from the termination of its distribution arrangement with WABCO Holdings, Inc.

GUIDANCE:

Meritor sees Q3 2020 revenue of $400-500 million, versus the consensus of $734.9 million.

Outlook for Third Quarter Fiscal Year 2020As a result of the highly uncertain operating environment, the company withdrew its guidance given on January 30, 2020, regarding its fiscal year 2020 financial results. The company is providing the following outlook only for the third quarter of fiscal 2020:

• Revenue to be in the range of $400 million to $500 million
• Cash flow from operations to be in the range of negative $150 million to negative $225 million, inclusive of the one-time impact from receivable factoring programs of negative $125 million to negative $175 million.

"The COVID-19 pandemic has dramatically impacted the global commercial vehicle industry and economies around the world," said Jay Craig, CEO and president of Meritor. "I am confident that our financial position, strengthened by the cost containment actions we are implementing, will enable us to successfully navigate this challenging period. I want to share my appreciation for our teams around the world who have done extraordinary work under the conditions of an uncertain business environment. As a committed and connected global team, we expect to regain the momentum we had prior to this health crisis."

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

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