Auto Stock Roundup: Meritor & Copart's Earnings Beat, Tenneco To Buy Ohlins
Zacks Investment Research | Nov 21, 2018 08:48PM ET
The earnings season is drawing to an end. Two auto companies — Meritor, Inc. (NYSE:MTOR) and Copart, Inc. (NASDAQ:CPRT) — reported their numbers in the past week. Both earnings and revenues for these companies surpassed the Zacks Consensus Estimate as well as came in higher than the prior-year quarter. During the quarter under review, Meritor witnessed improved market share, new business wins and improved production across all the key markets. Meanwhile, rise in vehicle sales and service revenues aided Copart’s performance.
The week also witnessed Tenneco Inc. (NYSE:TEN) announcing a deal to acquire a Swedish technology company, Ohlins Racing A.B. (Ohlins). This acquisition is likely to aid Tenneco to progress in the areas of intelligent suspension, autonomous driving and mobility. AutoNation, Inc. (NYSE:AN) partnered with Santa Monica-based car subscription company, Fair. This partnership signals toward the AutoNation’s unwavering commitment to embrace technology in car subscription to enhance customer experience.
Recap of the Week’s Most Important Stories
1. Meritor recorded adjusted earnings of 82 cents per share in fourth-quarter fiscal 2018 (ended Sep 30, 2018) compared with 62 cents a year ago. The figure comfortably surpassed the Zacks Consensus Estimate of 78 cents.
Adjusted income from continuing operations was $73 million compared with $56 million in fourth-quarter fiscal 2017.
Sales increased approximately 17% year over year to $1.08 billion. The top line also beat the Zacks Consensus Estimate of $1.03 billion. This rise was due to improved market share, new business wins and improved production across all the key markets.
In fiscal 2018, Meritor recorded revenues of $4.2 billion, marking 25% rise from the prior fiscal year. Net income from continuing operations was $120 million or $1.31 per share.
Meritor’s adjusted EBITDA (earnings before interest, tax, depreciation and amortization) increased to $118 million from $98 million a year ago. Adjusted EBITDA margin was 10.9% compared with 10.6% a year ago. Gain in adjusted EBITDA margin was driven by an increase in revenues and the positive impact of changes in the company's retiree medical benefits. These positives were partly offset by the sale of Meritor’s interest in Meritor WABCO joint venture along with elevated material and freight costs. (Read more: Zacks Investment Research
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