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Meritor Inc. reported a net loss and a broad decline in revenue in its fiscal-year third quarter amid decreased customer demand and government mandates aimed at battling exposure to the novel coronavirus pandemic.
For the period ended June 30, the company posted a net loss of $36 million, or minus 50 cents per diluted share, compared with a net income of $86 million, or $1, a year earlier.
Revenue declined to $514 million compared with $1.1 billion in the 2019 period.
“We took aggressive actions to reduce our cost structure in the short term to preserve liquidity and stabilize cash flow,” CEO Jay Craig said in the earnings release. “At the same time, we are making the appropriate investments to ensure the company is in a strong product position for the future.”
Meritor ended its third fiscal quarter with $970 million of total liquidity.
Meanwhile, the majority of the company’s facilities were idled during April with production increasing throughout the remainder of the quarter. Meritor noted July 27 most of the company’s salaried employees are working remotely until further notice.
All business segments in the quarter had lower overall revenue, but two regions posted positives.
In the quarter, commercial vehicle sales in North America fell to $164 million compared with $528 million a year earlier.
European commercial vehicle sales were $70 million compared with $180 million.
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Commercial vehicle sales in Brazil, China, India and other Asia-Pacific regions fell to $81 million overall compared with $182 million.
North American aftermarket and industrial sales also dropped, to $164 million from $253 million.
Aftermarket and industrial sales in Europe climbed to $33 million compared with $23 million.
Aftermarket and industrial sales in Brazil and China were $1 million each. A year earlier, it had no sales there in this segment.
While aftermarket facilities were not idled during the third quarter of fiscal 2020, sales were lower in comparison with the third quarter of fiscal 2019 due to changes in customer demand and the impact from the termination of the Wabco distribution arrangement. Industrial sales also were down, driven by decreased volumes as a result of the impact of the pandemic, partially offset by the revenue generated from the AxleTech business, the company reported.
“There is uncertainty around the duration and breadth of the COVID-19 pandemic, as well as the impact it will have on the company’s operations, supply chain and demand for its products,” the earnings report said. “As a result, the ultimate impact on the company’s business, financial condition or operating results cannot be reasonably estimated at this time.”
The company’s fiscal fourth-quarter guidance included a net loss of about $10 million, or a diluted loss per share of about 15 cents, on sales of about $700 million.
Meritor, headquartered in Troy, Mich., is a global supplier of integrated systems, modules and components to original equipment manufacturers and the aftermarket for the commercial vehicle, transportation and industrial sectors.
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