Meritor, which has just changed its name from ArvonMeritor, is revising guidance for its second quarter of fiscal year 2011.
The company now expects sales in the range of $1,180m to $1,210m, adjusted EBITDA in the range of $77m to $83m, adjusted income from continuing operations in the range of $2m to $10m and free cash flow to be slightly negative.
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“Dramatically rising steel prices combined with increasing volumes in the North America commercial truck market, and greater than anticipated Caiman launch costs are impacting our ability to convert on higher revenue this quarter,” said CFO Jay Craig. “In addition, our expectations for the second quarter are negatively affected by an unresolved dispute regarding royalty income.”
The company reiterated that there is no change in its planning assumptions for the full fiscal year of 2011 which call for capital expenditures in the range of $75m to $90m, interest expense in the range of $100m to $110m, cash interest in the range of $85 to $95m, income tax expense in the range of $70 to $90m and cash income taxes in the range of $50 to $70m.
