Meritor has a 24.7% drop in its income
Meritor Inc. posted revenue of $ 872 million in the first quarter of 2020, a 24.7% drop from the same period last year.
The decrease was driven by lower global production volumes, including changes in customer demand and the impact of government mandates as a result of COVID-19.
At the same time, Meritor had a net profit of $ 241 million, compared to $ 72 million in the first quarter of 2019.
Meritor is a premier global provider of a broad range of integrated systems, modules and components for Original Equipment Manufacturers (OEMs) and the aftermarket for the commercial vehicle, transportation and industrial sectors.
The company serves commercial truck, trailer, military, bus and coach OEMs, construction and other industrial manufacturers, and certain aftermarket markets.
Company results
In March 2020, the World Health Organization declared a global health pandemic related to the recent outbreak of a new coronavirus. The COVID-19 pandemic negatively affected the company’s financial performance and will continue to have an adverse impact for at least the rest of fiscal year 2020.
As a result, the company’s salaried employees are working remotely until further notice. There is uncertainty about the duration and breadth of the COVID-19 pandemic, as well as the impact it will have on the company’s operations, supply chain, and demand for its products.
Meritor and acquisitions
On July 26, 2019, the company purchased 100% of the voting interest of the AxleTech group companies for approximately $ 179 million in cash, subject to certain adjustments in the purchase price.
According to the company itself, the acquisition of AxleTech enhances Meritor’s growth platform with the addition of a portfolio of complementary products that includes a complete line of independent suspensions, axles, braking solutions and transmission components in the off-road markets, defense, specialty and after-sales.
AxleTech operates within Meritor’s secondary, industrial and trailer market segment.
Then, on January 16, 2020, Meritor acquired 100% of the voting share of Transportation Power, Inc. for a cash purchase price of approximately $ 15 million, subject to certain adjustments in the purchase price.
