Meritor, Inc. (MTOR) has reported a 42.31 percent plunge in profit for the quarter ended Dec. 31, 2016. The company has earned $15 million, or $0.17 a share in the quarter, compared with $26 million, or $0.28 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $22 million, or $0.25 a share compared with $31 million or $0.33 a share, a year ago.
Revenue during the quarter dropped 13.60 percent to $699 million from $809 million in the previous year period. Gross margin for the quarter contracted 12 basis points over the previous year period to 12.73 percent. Total expenses were 95.28 percent of quarterly revenues, up from 94.19 percent for the same period last year. That has resulted in a contraction of 109 basis points in operating margin to 4.72 percent.
Operating income for the quarter was $33 million, compared with $47 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $64 million compared with $76 million in the prior year period. At the same time, adjusted EBITDA margin contracted 24 basis points in the quarter to 9.16 percent from 9.39 percent in the last year period.
"We remain on track to deliver financial results in fiscal year 2017 consistent with our prior guidance. As we look beyond 2017, we are fully aligned to our M2019 plan with significant attention on growing our top line," said Jay Craig, chief executive officer and president. "As our growth initiatives gain traction and truck volumes rebound in the global markets, we will be well-positioned to achieve our three-year financial objectives."
For fiscal year 2017, Meritor, Inc. projects revenue to be in the range of $3,000 million to $3,100 million. The company expects net income to be in the range of $80 million to $85 million. The company forecasts diluted earnings per share to be in the range of $0.90 to $0.95. The company forecasts diluted earnings per share to be in the range of $1.25 to $1.40 on adjusted basis.
Operating cash flow remains negative
Meritor, Inc. has spent $14 million cash to meet operating activities during the quarter as against cash outgo of $5 million in the last year period.
The company has spent $15 million cash to meet investing activities during the quarter as against cash outgo of $18 million in the last year period.
The company has spent $4 million cash to carry out financing activities during the quarter as against cash outgo of $42 million in the last year period.
Cash and cash equivalents stood at $125 million as on Dec. 31, 2016, down 2.34 percent or $3 million from $128 million on Dec. 31, 2015.
Working capital increases sharply
Meritor, Inc. has recorded an increase in the working capital over the last year. It stood at $154 million as at Dec. 31, 2016, up 30.51 percent or $36 million from $118 million on Dec. 31, 2015. Current ratio was at 1.23 as on Dec. 31, 2016, up from 1.15 on Dec. 31, 2015.
Days sales outstanding went up to 62 days for the quarter compared with 55 days for the same period last year.
Days inventory outstanding has decreased to 25 days for the quarter compared with 49 days for the previous year period.
Debt comes down
Meritor, Inc. has recorded a decline in total debt over the last one year. It stood at $994 million as on Dec. 31, 2016, down 5.78 percent or $61 million from $1,055 million on Dec. 31, 2015. Total debt was 41.52 percent of total assets as on Dec. 31, 2016, compared with 51.46 percent on Dec. 31, 2015.
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