Meritor, Inc (MTOR) swung to a net profit for the quarter ended Sep. 30, 2016. The company has made a net profit of $452 million, or $ 5.10 a share in the quarter, against a net loss of $21 million, or $0.22 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $30 million, or $0.37 a share compared with $38 million or $0.40 a share, a year ago.
Revenue during the quarter dropped 14.65 percent to $728 million from $853 million in the previous year period. Gross margin for the quarter contracted 112 basis points over the previous year period to 11.54 percent. Operating margin for the quarter period stood at positive 5.36 percent as compared to a negative 3.05 percent for the previous year period.
Operating income for the quarter was $39 million, compared with an operating loss of $26 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $74 million compared with $81 million in the prior year period. At the same time, adjusted EBITDA margin improved 67 basis points in the quarter to 10.16 percent from 9.50 percent in the last year period.
“Through the efforts of our leadership team and each of our employees, we made tremendous progress over the past three years to fundamentally transform the company,” said Jay Craig, chief executive officer and president of Meritor. “The changes we made enabled us to achieve our M2016 financial objectives and establish the foundation for sustainable growth in the future. Despite the challenging end markets we anticipate for fiscal year 2017, we remain confident that we will maintain our strong margin and bottom-line earnings performance.”
Operating cash flow improves significantly
Meritor, Inc has generated cash of $204 million from operating activities during the year, up 110.31 percent or $107 million, when compared with the last year.
The company has spent $86 million cash to meet investing activities during the year as against cash outgo of $87 million in the last year.
The company has spent $152 million cash to carry out financing activities during the year as against cash outgo of $42 million in the last year period.
Cash and cash equivalents stood at $160 million as on Sep. 30, 2016, down 17.10 percent or $33 million from $193 million on Sep. 30, 2015.
Working capital drops significantly
Meritor, Inc has witnessed a decline in the working capital over the last year. It stood at $147 million as at Sep. 30, 2016, down 42.13 percent or $107 million from $254 million on Sep. 30, 2015. Current ratio was at 1.19 as on Sep. 30, 2016, down from 1.24 on Sep. 30, 2015.
Days sales outstanding were almost stable at 25 days for the quarter, when compared with the last year period.
Days inventory outstanding has increased to 23 days for the quarter compared with 21 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 $996 million as on Sep. 30, 2016, down 5.23 percent or $55 million from $1,051 million on Sep. 30, 2015. Total debt was 40.31 percent of total assets as on Sep. 30, 2016, compared with 42.29 percent on Sep. 30, 2015.
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