Heavy truck component supplier Meritor said sales fell 25% year on year to US$871m in its second fiscal quarter ended 31 March 2020.
It cited lower global production volume, including changes in customer demand, and the impact of government mandates as a result of COVID-19, partially offset by sales from the AxleTech business acquired in the fourth quarter of fiscal 2019, for the fall.
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Net income rose to $241m, or $3.20 per share, compared to $72m and $0.84 but this was boosted by $203m of after tax income from the termination of a distribution arrangement with Wabco Holdings.
Adjusted EBITDA was $107m, compared to $139m.
Meritor said the COVID-19 pandemic led to suspended production in most of its global commercial truck manufacturing facilities, beginning late in the second quarter and continuing into the third. Most operations in North America and Europe are now running limited production with facilities in India and South America expected to restart early in May. China is fully operational.
The company withdrew earlier third quarter guidance and now says only that revenue will be in the range of $400m to $500m and cash flow will be negative $150m to negative $225m.
"The COVID-19 pandemic has dramatically impacted the global commercial vehicle industry and economies around the world," said Jay Craig, CEO and president.
"I am confident that our financial position, strengthened by the cost containment actions we are implementing, will enable us to successfully navigate this challenging period."
