UPDATED – Trailer Maker Wabash National Corp. (WNC) second quarter earnings showed a big leap in profitability from a year ago, including some record numbers. Meritor saw its results hampered by a strong dollar and weak overseas markets but reported income gains on an adjusted basis.
Wabash net income totaled $28.6 million, or 41 cents per diluted share, compared to net income of $16.2 million, or 23 cents per diluted share a year earlier.
For the second quarter of 2015, net sales increased 6% to $515 million from $486 million in the prior year quarter. Operating income rose 24% to a record quarter of $42.1 million, compared to $33.9 million during the same time in 2014.
Commercial trailer products led the way, said President and CEO Dick Giromini. “New trailer shipments for the second quarter were approximately 16,900, coming in at the top-end of our previous guidance of 16,000 to 17,000 trailers. The year-over-year increase in total trailer demand, as evidenced by our strong backlog of $1.1 billion, along with ongoing demand strength being projected by both ACT Research and FTR, provides us even greater confidence that 2015 will prove to be our fourth consecutive year of record performance.”
The company raised its full-year shipment and adjusted earnings guidance to between 63,000 to 66,000 trailers and between $1.25 to $1.35 per diluted share.
Wabash’s commercial trailer products division achieved new quarterly records for net sales, gross margin and operating income. Net sales were $395 million, an increase of 17.4%, on shipments of 16,150 trailers, or 2,250 more trailers than the prior year period. Gross profit margin increased $18.2 million, while operating income increased by $17 million to $39 million from the second quarter last year.
The company’s diversified products operation, which includes composite materials operations and liquid tank systems, saw net sales fall $21 million, or 17.9%, compared to the previous year period. This was primarily due to reduced demand for composite product offerings and non-trailer related equipment, as well as fewer tank trailer shipments due to delays in customer pick-ups, according to Wabash.
The retail division net sales, which includes the company’s network of new and used trailer sales, parts and service locations, was $45 million, a decrease of 11.9% compared with the prior year. Wasbash said this was primarily due to fewer retail locations resulting from the transition of three West Coast locations to independent dealers in May 2014, as demand for trailers and parts and service remained healthy throughout the quarter. On a same store basis, net sales increased 5% compared with the prior year period.
Further details are on the Wabash National website.
Truck component manufacturer Meritor (MTOR) saw far lower net profit than the same quarter a year ago, but that was because last year's numbers included $209 million from the antitrust settlement with Eaton Corp. Earnings were up on an adjusted basis.
For its third fiscal quarter ending June 30, Meritor's net income from continuing operations was $15 million, or 15 cents per diluted share, compared with $237 million, or $2.34 per diluted share a year earlier.
However, adjusted net income from continuing operations was $41 million, or adjusted diluted earnings per share of $0.41, up from $29 million, or $0.29, in the prior year.
Sales totaled $909 million, down 7%, during the same time frame. This decrease was due to currency exchange rate declines in Europe and Brazil against the U.S. dollar. When adjusted for the impact of foreign currency, sales for the period increased 1% from a year ago, according to the company.
Commercial Truck & Industrial segment sales were $705 million, down 7%, compared with the same period last year.
“Revenue was unfavorably impacted by the strengthening U.S. dollar against most currencies – especially the euro and the Brazilian real. Higher truck production in North America, driven by a strong Class 8 market, offset lower production in South America and China,” the company said in a statement.
The segment’s earnings before interest, taxes, depreciation and amortization (EBITDA) was $58 million for the quarter, up $3 million from the third quarter of fiscal year 2014.
Meritor’s Aftermarket & Trailer segment posted sales of $233 million, down 8% from the same period last year.
The unfavorable impact of the strengthening U.S. dollar against the euro drove lower revenue in the company's aftermarket business in Europe, according to the company.
Segment EBITDA was $31 million, compared with $28 million in the third quarter of fiscal year 2014.
While Meritor made no change to expectations for revenue for this year, in the range of $3.5 billion to $3.55 billion, it revised adjusted EBITDA margin to approximately 9.3%, compared with prior guidance of 9% to 9.2%. It expects adjusted diluted earnings per share from continuing operations will range from $1.40 to $1.50, as compared with prior guidance of $1.30 to $1.40.
It also noted that it has secured standard product positioning with Paccar for front axles in North America. This follows an agreement with Paccar early this year for preferred positioning on rear axles in North America and Australia.
There is more information on the Meritor website.
Updated 2 p.m. EDT August 4, 2015, to include Meritor adjusted net income accounting for previous year's Eaton antitrust settlement.