Allison, Dana, Eaton See Higher Profits; Meritor Earnings Decline on Tax Expense
This story appears in the May 8 print edition of Transport Topics.
Three leading commercial vehicle suppliers notched quarterly gains in net income and revenue for the period ended March 31, while a fourth supplier posted declines in both areas but expressed optimism that its financial performance would improve later this year.
Allison Transmission Holdings Inc. reported first-quarter net income and revenue surged on growth in its North American parts business. Net income was $83 million, or 52 cents per share, compared with $48 million, or 28 cents, for the same period in 2016. Revenue rose 8% to $499 million year-over-year.
The results were “driven by stronger-than-anticipated demand for North America service parts” for its automatic transmissions, Chairman and CEO Lawrence Dewey said in a statement.
Service parts, support equipment and other end market revenue was up 39% compared with the same period in 2016 and up 9% on a sequential basis.
“Given first quarter 2017 results and current end markets conditions we are updating our full year net sales guidance to an increase in the range of 7.5% to 10.5%,” Dewey said.
Dana Inc. reported first-quarter net income surged to $80 million, or 51 cents per share, from $48 million, or 30 cents, as all segments posted stronger earnings before interest, taxes, depreciation and amortization.
Led by stronger sales in its light vehicles and off-highway segments, revenue inched up to $1.7 billion, compared with $1.5 billion a year earlier, it said.
Sales in the commercial vehicle segment slipped to $329 million, compared with $333 million a year earlier. Its commercial vehicle segment includes steer and drive axles, drive shafts, and tire pressure management and hub systems.
“Dana is off to a good start this year as we successfully launch new programs across end markets and continue to convert our sales backlog,” Dana CEO James Kamsickas said in a statement.
Sales for the full year will be $6.2 billion to $6.4 billion, according to guidance the company provided May 2.
At the same time, power management company Eaton Corp. notched gains in net income and revenue, too, in its first quarter.
Net income rose to $432 million, or 96 cents, from $403 million, or 88 cents.
Revenue rose 1% to $4.8 billion compared with the 2106 period. The increase consisted of 2% growth in organic sales partially offset by a 1% decline from negative currency translation, the Dublin, Ireland-based company said.
“Order growth showed an improvement in most segments compared to the fourth quarter of 2016,” Craig Arnold, Eaton chairman and CEO, said in a statement.
“Most notably, hydraulics orders grew 22% versus growth of 8% in the fourth quarter of 2016, and electrical systems and services orders were flat compared to a decline of 7% in the fourth quarter of 2016.
For commercial vehicles, Eaton designs and manufactures transmissions, clutches and fluid and air conveyance solutions.
Meanwhile, Meritor Inc. in its fiscal-year second quarter posted lower net income related to tax issues as revenue dipped.
Net income dropped 28% to $23 million, or 24 cents per share, compared with $32 million, or 35 cents, year-over-year. Lower net income year-over-year was driven primarily by higher income tax expense recognized in the current year, the Troy, Mich.-based company said.
Revenue slipped 2% to $806 million, compared with $821 million a year earlier.
The decline in revenue was primarily driven by lower commercial truck volume in North America, as Class 8 truck production was down 20% year-over-year. This was largely offset by increased production in Europe, India and China, in addition to new business wins.
“This was another strong quarter for Meritor,” CEO Jay Craig said in a statement. “Continued operational performance, combined with signs of improvement in global end markets, gives us confidence that our 2017 financial performance will be better than previously planned.”
Its aftermarket and trailer segment posted sales of $215 million, down $3 million from the same period a year ago. The decrease in sales was primarily due to lower U.S. trailer production, which was partially offset by higher aftermarket revenue, it said.
Meritor supplies drivetrain systems and components such as axles, drivelines, braking and suspension systems for medium- and heavy-duty trucks.
Also, its North American joint venture with Wabco Holdings Inc. offers braking systems and controls, active safety systems and suspension and control systems for commercial vehicles.
