The 10-second takeaway
For the quarter ended June 30 (Q3), Meritor missed estimates on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue shrank and GAAP earnings per share expanded significantly.
Margins improved across the board.
Meritor notched revenue of $1.11 billion. The seven analysts polled by S&P Capital IQ hoped for a top line of $1.23 billion on the same basis. GAAP reported sales were 14% lower than the prior-year quarter's $1.29 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 $0.38. The 11 earnings estimates compiled by S&P Capital IQ predicted $0.39 per share. GAAP EPS of $0.50 for Q3 were 178% higher than the prior-year quarter's $0.18 per share. (The prior-year quarter included -$0.06 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 11.9%, 150 basis points better than the prior-year quarter. Operating margin was 5.7%, 100 basis points better than the prior-year quarter. Net margin was 4.4%, 310 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $1.17 billion. On the bottom line, the average EPS estimate is $0.37.
Next year's average estimate for revenue is $4.72 billion. The average EPS estimate is $1.18.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 146 members rating the stock outperform and 50 members rating it underperform. Among 49 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 34 give Meritor a green thumbs-up, and 15 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 $9.31.
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