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Meritor Inc. reported higher fiscal second-quarter revenue and lower net income reflecting, respectively, strong truck production and a previous distribution agreement termination.
For the second quarter of fiscal 2021, ended March 31, net income was $63 million, or 86 cents per diluted share, compared with $241 million, $3.20, in the same period last year.
In its earnings release, the company said lower net income year-over-year “was driven primarily by $203 million of after-tax income" associated with the termination of the distribution arrangement with Wabco Holdings Inc. during the second quarter of fiscal year 2020.
That was partially offset by the recognition of $15 million of after-tax income related to value-added tax credits in Meritor’s wholly owned Brazilian subsidiary during the second quarter of fiscal 2021 and cost reduction actions executed in the second half of fiscal 2020.
Meritor previously distributed in North America Wabco-branded anti-lock brake system technologies, stability control, advanced driver assistance systems, air systems and other replacement products.
Revenue rose to $983 million, up $112 million, or about 13% compared with a year earlier.
The Troy, Mich.-based company noted the increase in revenue was primarily driven by higher global truck production in all markets, partially offset by the impact of the termination of its distribution arrangement with Wabco.
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“We are maintaining our full-year guidance for fiscal year 2021 despite anticipated headwinds from higher steel costs and increased electrification expense as we continue to win new business,” CEO Chris Villavarayan said in a release.
Commercial truck revenue reached $777 million, up $146 million, or 23%, compared with a year earlier. Meritor noted the increase in sales was primarily driven by higher global truck production in all markets.
Its aftermarket and industrial segment posted revenue of $247 million, down $30 million, or 11%, from the same period a year ago. The decrease was due primarily to the impact from the termination of the Wabco distribution arrangement.
Meanwhile, the company forecast its fiscal year 2021 net income to be in the range of $145 million to $155 million with diluted earnings per share in the range of $2.00 to $2.15. It expects revenue to be in the range of $3.65 billion to $3.8 billion.
Meritor serves commercial truck, trailer, off-highway, defense, specialty and aftermarket customers as a global supplier of drivetrain, mobility, braking and aftermarket solutions. It has about 8,600 employees in manufacturing facilities, engineering centers, joint ventures, distribution centers and global offices in 19 countries.
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