Meritor Rides Truck Market to Higher Fiscal Q3 Results
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Meritor Inc. reported increases in net income and revenue for its fiscal third quarter amid gains in the North American truck market.
For the period ended June 30, net income improved to $42 million, or 58 cents per diluted share, compared with a net loss of $36 million, loss of 50 cents, in the same period last year.
The Troy, Mich.-based company attributed the improvement to higher sales volumes, partially offset by higher freight, steel and electrification-development costs.
Revenue climbed to $1 billion, up $502 million or 98% compared with a year earlier — driven by higher global truck production in all markets.
“We had a very good quarter,” Meritor CEO Chris Villavarayan said during an earnings call. “I want to recognize the dedication and commitment of our employees around the world and extend my appreciation to them.
Villavarayan
“The labor shortage in North America as well as global supply chain restraints have created a demanding environment, especially considering revenue has increased over $500 million dollars year-over-year on significantly higher volumes. Despite these dynamics, Meritor’s safety, quality and delivery have remained excellent. This strong performance has allowed us to gain market share in some of our major product lines in North America.”
Meritor’s commercial truck segment notched revenue of $800 million, up $464 million, or 138%, compared with the 2020 period. Segment-adjusted earnings before interest taxes depreciation and amortization was $69 million, up $92 million, compared with the third quarter of fiscal 2020.
The aftermarket and industrial segment had sales of $258 million, up $55 million, or 27%, compared with a year earlier. Segment-adjusted EBITDA was $36 million, up $5 million, compared with the third quarter of fiscal 2020.
Meanwhile, the company reported it is revising its guidance from its prior outlook for fiscal 2021:
- Revenue to be $3.9 billion (prior outlook of $3.650 billion to $3.8 billion).
- Net income to be $175 million (prior outlook of $145 million to $155 million).
- Diluted earnings per share of $2.40 (prior outlook of $2.00 to $2.15).
Company highlights in the quarter included:
Meritor will provide electric drivetrain sub-systems for Hyliion Corp.’s Hypertruck ERX electrified powertrain for Class 8 trucks. Hyliion’s powertrain system will feature Meritor’s Blue Horizon 14Xe ePowertrain integrated drive axles as the standard position propulsion and regeneration hardware on Hyliion vehicle upfits.
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Meritor’s 14Xe ePowertrain for medium- and heavy-duty commercial vehicles will be produced in Asheville, and Forest City, N.C.
“We are very strong on the heavy side,” Villavarayan said, “and we are also further ahead, from my perspective, in the electric powertrain. We are launching our e-axle, first to market, later this year. So as we think about it, this fall we will have our 14Xe in production and ready to go to customers. When we think about why are customers picking us on this side, it’s primarily the availability of product, speed to market, and the weight and efficiency difference. So by integrating an e-powertrain you are saving somewhere between 400 and 800 pounds, and you are creating the space [for more batteries].”
Meritor launched its 17Xe axle in its fiscal 2021 second quarter, and is developing a 12Xe axle.
Also, Hino will be evaluating and testing Meritor’s ePowertrain for its development path to zero emissions vehicles.
Meritor has been a long-standing key supplier for Hino Motors Manufacturing North America for dressed axles on its medium-duty truck models, supplying 100% of those axles. With this new collaboration both companies look to expand advanced, electrified drive systems to further zero-emissions development.
Villavarayan said Meritor, overall, has 1 million miles logged on 180 electric vehicles.
Meritor, Inc. is a global supplier of drivetrain, mobility, braking, aftermarket and electric powertrain solutions for commercial vehicle and industrial markets
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