Partsmaker Meritor’s fiscal fourth-quarter earnings soared on double-digit sales growth in all segments but the company slashed its full-year guidance as its fiscal 2012 demand assumptions changed substantially over the past few months.
Shares fell as Meritor forecast full-year revenue of US$4.8bn compared with $5.34bn by analysts surveyed by Thomson Reuters, Dow Jones reported.
Meritor said it expects fiscal 2012 North American production of Class 8 and medium-duty trucks to rise to 280,000 units, significantly lower than its August forecast of 330,000 units.
Meritor also expects the European truck market to soften, primarily due to the continued credit crisis and government austerity programmes, and cut its full-year forecast to 350,000 units from its prior estimate of 389,000.
The company said Brazil’s economy has slowed recently, prompting an interest rate reduction and increased government stimulus program. As a result, Meritor lowered its forecast for South America to 190,000 units from its prior guidance of 204,000 units.
Meritor has shown improved sales in recent quarters with the help of a rebound in North American and European auto demand and a restructuring effort that tied its future to the commercial truck industry.
For the quarter ended 30 September, Meritor reported a profit of $31m, up from $2m a year earlier.
Revenue jumped 29% to $1.22bn compared with the August projection of $1.18 to $1.28bn.
Gross margin fell to 9.7% from 12.5% as input costs increased 34%.
At its commercial-truck business – largest by revenue – sales were up 40%, while the segment’s profit rose 53%. Sales grew 22% in the industrial segment, driven by higher sales in Asia Pacific, while the aftermarket and trailer business’s sales rose 16% on an increase in truck tonnage in North America and Europe.