Meritor announced its second-quarter earnings for the 2021 fiscal year Tuesday.
The company reports it posted sales of $983 million, up $112 million, or approximately 13 percent, from the same period last year. The increase in sales was primarily driven by higher global truck production in all markets, partially offset by the impact of the termination of Meritor's distribution arrangement with WABCO Holdings, which occurred late in the second quarter of fiscal year 2020.
Net income attributable to Meritor was $63 million, or $0.86 per diluted share, compared to $241 million, or $3.20 per diluted share, in the same period last year. Net income from continuing operations attributable to Meritor was $63 million, or $0.86 per diluted share, compared to $240 million, or $3.19 per diluted share, in the same period last year. Lower net income year over year was driven primarily by $203 million of after-tax income associated with the termination of the distribution arrangement with WABCO during the second quarter of fiscal year 2020, partially offset by the recognition of $15 million of after-tax income related to value-added tax credits in Meritor's wholly-owned Brazilian subsidiary during the second quarter of fiscal year 2021 and cost reduction actions executed in the second half of fiscal year 2020.
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Adjusted EBITDA was $111 million, compared to $107 million in the second quarter of fiscal year 2020. Adjusted EBITDA margin was 11.3 percent, compared to 12.3 percent in the same period last year. Meritor says the increase in adjusted EBITDA year over year was driven primarily by conversion on higher sales and cost reduction actions executed in the second half of the prior fiscal year, partially offset by higher incentive compensation and freight costs. Adjusted EBITDA margin decreased year over year due primarily to increased incentive compensation expense, the company adds.
"We are maintaining our full-year guidance for fiscal year 2021 despite anticipated headwinds from higher steel costs and increased electrification expense as we continue to win new business," says Chris Villavarayan, president and CEO, Meritor. "Our path to successfully complete M2022 remains on-track."
Meritor says its Commercial Truck sales for the second quarter of fiscal year 2021 were $777 million, up $146 million, or 23 percent, compared to the same period last year. The increase in sales was primarily driven by higher global truck production in all markets.
Segment adjusted EBITDA for Commercial Truck was $73 million, up $15 million, compared to the second quarter of fiscal year 2020. Segment adjusted EBITDA margin increased to 9.4 percent in the second quarter of fiscal year 2021, compared to 9.2 percent in the same period of the prior year.
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The Aftermarket & Industrial segment posted sales of $247 million in the second quarter of fiscal year 2021, down $30 million, or 11 percent, from the same period a year ago. The decrease in sales in the second quarter of fiscal year 2021 was due primarily to the impact from the termination of the WABCO distribution arrangement, Meritor reports.
Segment adjusted EBITDA for Aftermarket & Industrial was $34 million, down $12 million, compared to the second quarter of fiscal year 2020. Segment adjusted EBITDA margin decreased to 13.8 percent in the second quarter of fiscal year 2021, compared to 16.6 percent in the same period of the prior year.
