The 10-second takeaway
For the quarter ended March 31 (Q2), Meritor missed estimates on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped slightly and GAAP earnings per share expanded significantly.
Margins grew across the board.
Meritor reported revenue of $1.16 billion. The seven analysts polled by S&P Capital IQ expected revenue of $1.19 billion on the same basis. GAAP reported sales were 2.7% lower than the prior-year quarter's $1.19 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 $0.33. The 10 earnings estimates compiled by S&P Capital IQ predicted $0.26 per share. GAAP EPS of $0.21 for Q2 were 17% higher than the prior-year quarter's $0.18 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 11.6%, 170 basis points better than the prior-year quarter. Operating margin was 5.3%, 150 basis points better than the prior-year quarter. Net margin was 1.7%, 30 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $1.29 billion. On the bottom line, the average EPS estimate is $0.42.
Next year's average estimate for revenue is $4.86 billion. The average EPS estimate is $1.17.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 143 members out of 194 rating the stock outperform, and 51 members rating it underperform. Among 51 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 39 give Meritor a green thumbs-up, and 12 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 $10.22.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.