Meritor, Inc. MTOR posted adjusted earnings per share of 80 cents in fourth-quarter fiscal 2021, which beat the Zacks Consensus Estimate of 55 cents and jumped from the year-ago figure of 15 cents. Adjusted income from continuing operations was $57 million in the reported quarter compared with $8 million recorded in the prior-year quarter.

Sales grew 25% year over year to $945 million in the fiscal fourth quarter. This year-over-year increase was primarily driven by higher global truck production in all markets. The top line, however, missed the Zacks Consensus Estimate of $1,012.4 million.

Adjusted EBITDA went up to $91 million from the year-earlier quarter’s $60 million. Adjusted EBITDA margin was 9.6% compared with the prior year’s 7.9%. This upside stemmed from higher sales volumes, partially offset by higher freight and steel costs.

Meritor, Inc. Price, Consensus and EPS Surprise

Meritor, Inc. price-consensus-eps-surprise-chart | Meritor, Inc. Quote

Segment Results

In the September quarter, revenues from the Commercial Truck & Trailer segment amounted to $740 million, growing 32% year over year on higher global truck production in all markets. The figure, however, missed the Zacks Consensus Estimate of $791 million. The segment reported an adjusted EBITDA of $54 million, rising from $24 million witnessed in the year-ago quarter. The figure missed the consensus mark of $55 million. The EBITDA margin came in at 7.3% during the quarter, increasing from 4.3% recorded in the prior-year quarter.

Quarterly revenues in the Aftermarket & Industrial segment totaled $250 million, up 11% from the year-ago level on higher volumes across the segment. The revenue figure topped the Zacks Consensus Estimate of $249 million. The segment’s adjusted EBITDA was $34 million, flat year over year. The figure, however, missed the consensus mark of $39.83 million. Also, EBITDA margin edged down 13.6% year over year compared with 15% in the prior-year quarter, primarily on elevated freight costs, which more than muted conversion on higher sales.

Financial Position

In the reported quarter, Meritor’s cash and cash equivalents summed $101 million as of Sep 30, 2021, falling steeply from $315 million as of Sep 30, 2020. Long-term debt was $1,008 million at the end of the fiscal fourth quarter, down from $1,188 million as of Sep 30, 2020.

During the fiscal fourth quarter, Meritor’s cash provided from operating activities was $51 million against the cash used for operating activities of $77 million witnessed in the year-ago quarter.

Free cash flow in the reported quarter was $8 million, down from $37 million recorded in the same period last year. In the quarter ended Sep 30, 2021, capital expenditure was $43 million compared with the $40 million incurred in the year-ago quarter.