Meritor sees profits, sales jump in 1998

TROY, Mich — Meritor Automotive reported a 35% gain in profits during its first year since being spun off from Rockwell International last September.

Profit before a charge was $299 million US for the company’s fiscal year ended Sept. 30. Fiscal 1998 sales were $3.8 billion, a 16% increase over last year’s sales of $3.3 billion. Net income for the year was $147 million, or $2.13 per share, an increase of 48% as compared with 1997 pro forma net income of $99 million, or $1.44 per share.

The company reported restructuring charges and spin-off costs of $29 million ($21 million after-tax), or 30 cents per share in the fourth quarter of fiscal 1997.

Sales in the Heavy Vehicle Systems group, which produces components for heavy trucks and trailers, grew to a record $2.4 billion, an increase of $404 million or 21% over 1997. Sales increased across the company’s heavy-duty product line, including axles, transmissions, clutches, drivelines, and brake systems.

Meritor’s Light Vehicle Systems division also reported sales of $1.5 billion, an increase of $123 million or 9% over 1997.

Chairman Larry Yost said he sees revenue growth corresponding with the company’s goal of 8% annual sales growth and earnings growth of 15% a year. He said the outlook for the first half of fiscal 1999 is strong, but warned of economic uncertainty thereafter. Yost said the company’s diverse product line should allow it to perform well.