Meritor Reports Higher Income, Revenue in FY Q1

Meritor via YouTube

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Meritor Inc. reported quarterly net income nearly doubled and revenue climbed by about 11%, and cited a rising truck market in multiple regions compared with a year earlier.

For the 2022 fiscal first quarter, ended Dec. 31, Meritor posted net income of $58 million, or 76 cents per diluted share, compared with $33 million, 44 cents, in the previous period. That was driven primarily by lower interest expense and higher sales volumes, partially offset by net steel costs, according to the Troy, Mich.-based company.

Revenue rose to $984 million, up $95 million compared with $889 million a year earlier. The increase was primarily driven by higher truck production in most global markets.

FY22 Q1 MTOR Earnings Prese... by Transport Topics

“Overall, we are pleased with our financial performance, and are off to a good start for the year,” Meritor CEO Chris Villavarayan said during the latest earnings call. “We’re working closely with our customers and suppliers to offset historically high freight and material costs while managing supply chain constraints and a prolonged labor shortage.”

Its commercial truck segment revenue jumped to $785 million, 14%, or $94 million, higher compared with the same 2020 period. The increase was primarily driven by higher truck production in most global markets.

“In the North American Class 8 market the backlog is estimated at approximately 260,000 trucks representing nearly a full year of industry production,” Carl Anderson, chief financial officer at Meritor, said during the earnings call.

“While we are closely monitoring constraints in the global supply chain, we are beginning to see some signs of stabilization. We are expecting supply chains to continue to improve as we progress throughout the year,” he added. “And I would say, certainly, as we see from Q1 to Q2 we do see more stabilization. And it’s probably too early to declare a victory.”

In North America, Meritor expects Class 8 production to be in the range of 270,000 to 290,000 units, an increase of almost 7% at the midpoint from 2021.

The aftermarket and industrial segment posted revenue sales for the first fiscal quarter of $241 million, up $7 million, or 3%, compared with the same period a year ago. The increase was primarily due to pricing actions taken in the segment.

In related news, Meritor on Feb. 2, announced an extension to its current Paccar agreement through 2025 to supply 14Xe ePowertrains and battery-electric vehicle integration kits for the Class 8 Kenworth T680E, and Peterbilt 579EV tractors and 520EV refuse trucks.

As part of Meritor’s Blue Horizon advanced technology portfolio, the 14Xe ePowertrain is a fully integrated, all-electric drive system and is the only integrated electric powertrain in production for Class 8 trucks in North America, Meritor noted.

Meritor is the leading commercial axle provider in North America, with a 70% share, Villavarayan said.

“So the e-powertrains are built off that scale,” he said. “We’ve been designing efficiency into axles for over a century. So we believe to have that capability will help us.”

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