A month has gone by since the last earnings report for Meritor (MTOR). Shares have added about 3.5% in that time frame, outperforming 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 the most recent earnings report in order to get a better handle on the important catalysts.

Meritor Q2 Earnings Beat Estimates, Decline Y/Y

Meritor posted adjusted earnings per share of 68 cents for second-quarter fiscal 2021 (ended Mar 31, 2021), surpassing the Zacks Consensus Estimate of 65 cents. Higher-than-anticipated revenues and profit from the Commercial Truck & Trailer segment resulted in this outperformance.

The bottom line, however, declined from the year-ago adjusted earnings of 74 cents a share. Sales rose 12.8% year over year to $983 million for the fiscal second quarter and surpassed the Zacks Consensus Estimate of $950 million.

Adjusted EBITDA edged up to $111 million from the year-earlier quarter’s $107 million. However, adjusted EBITDA margin was 11.3% compared with the prior year’s 12.3%.

Segment Results

For the March-end quarter, revenues in the Commercial Truck & Trailer segment amounted to $777 million, up 23% year over year on higher market volumes in all markets served. Moreover, the figure outpaced the Zacks Consensus Estimate of $735 million. The segment reported adjusted EBITDA of $73 million, up from $58 million witnessed in the year-ago quarter on higher sales and cost-cut efforts. The figure also surpassed the consensus mark of $62 million. EBITDA margin expanded to 9.4% for the quarter from 9.2% recorded in the prior-year quarter.

Quarterly revenues in the Aftermarket & Industrial segment totaled $247 million, dropping 10.8% from the year-ago level on account of termination of the WABCO distribution arrangement. The revenue figure also missed the Zacks Consensus Estimate of $266 million. The segment’s adjusted EBITDA was $34 million, down from $46 million recorded in the prior-year period. The metric also fell shy of the consensus mark of $42.61 million. EBITDA margin contracted to 13.8% for the quarter from 16.6% during the year-ago period.

Financial Position

For the reported quarter, Meritor’s cash and cash equivalents summed $321 million as of Mar 31, 2021. Long-term debt was $1,186 million at fiscal second quarter-end.

Its cash flow from operating activities for the quarter under review was $63 million compared with cash used for operating activities of $309 million in the year-ago quarter. For the quarter ended Mar 31, 2021, capital expenditure was $16 million compared with $17 million incurred in the comparable year-ago period.