The 10-second takeaway
For the quarter ended Sep. 30 (Q4), Meritor missed slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped significantly and GAAP earnings per share dropped significantly.
Gross margins grew, operating margins dropped, net margins shrank.
Meritor notched revenue of $986.0 million. The eight analysts polled by S&P Capital IQ expected revenue of $1.01 billion on the same basis. GAAP reported sales were 16% lower than the prior-year quarter's $1.17 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.32. The 12 earnings estimates compiled by S&P Capital IQ predicted $0.19 per share. GAAP EPS of $0.05 for Q4 were 84% lower than the prior-year quarter's $0.32 per share. (The prior-year quarter included -$0.20 per share in earnings from discontinued operations.)
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 11.5%, 130 basis points better than the prior-year quarter. Operating margin was 3.2%, 170 basis points worse than the prior-year quarter. Net margin was 0.5%, 210 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $1.07 billion. On the bottom line, the average EPS estimate is $0.18.
Next year's average estimate for revenue is $4.44 billion. The average EPS estimate is $1.06.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 150 members out of 199 rating the stock outperform, and 49 members rating it underperform. Among 52 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 42 give Meritor a green thumbs-up, and 10 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Meritor is outperform, with an average price target of $6.56.
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