A month has gone by since the last earnings report for Meritor (MTOR). Shares have added about 0.2% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Meritor due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Meritor Puts Up a Stellar Show in Q3

Meritor posted adjusted earnings per share of 62 cents in third-quarter fiscal 2021 (ended Jun 30, 2021), handily beating the Zacks Consensus Estimate of 50 cents. Higher-than-anticipated adjusted EBITDA from the Commercial Truck & Trailer segment resulted in this outperformance.

The bottom line reversed the year-ago adjusted loss of 36 cents a share. Adjusted income from continuing operations was $45 million in the reported quarter as against the loss of $26 million recorded in the prior-year period.

Sales surged 98%, year over year, to $1,016 million in the fiscal third quarter. This year-over-year increase was primarily driven by higher global truck production in all markets. Moreover, the reported figure surpassed the Zacks Consensus Estimate of $965 million.

Adjusted EBITDA went up to $107 million from the year-earlier quarter’s $7 million. Adjusted EBITDA margin was 10.5% compared with the prior year’s 1.4%. This upside stemmed from higher sales volumes, partially negated by higher freight, steel and electrification costs.

Segment Results

For the June-end quarter, revenues in the Commercial Truck & Trailer segment amounted to $800 million, skyrocketing 138% year over year on higher global truck production in all markets. Moreover, the figure outpaced the Zacks Consensus Estimate of $697 million. The segment reported an adjusted EBITDA of $69 million, reversing the loss of $23 million witnessed in the year-ago quarter. The figure also surpassed the consensus mark of $54 million. The EBITDA margin came in at 8.6% during the quarter versus the -6.8% recorded in the prior-year quarter.

Quarterly revenues in the Aftermarket & Industrial segment totaled $258 million, up 27% from the year-ago level, on higher volumes across the segment. The revenue figure, however, lagged the Zacks Consensus Estimate of $274 million. The segment’s adjusted EBITDA was $36 million, up from the $31 million witnessed in the prior-year period. The figure, however, missed the consensus mark of $41.25 million. Also, EBITDA margin edged down 1.3%, year on year, to 14% during the April-June period, primarily on elevated freight costs, which more than muted conversion on higher sales.