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UPDATE 2-Meritor cuts forecast on China, India outlook
August 1, 2012 / 12:56 PM / 5 years ago

UPDATE 2-Meritor cuts forecast on China, India outlook

* Sees FY adj EPS $0.90-$1.15 vs $1.08-$1.39 prior-view

* Sees FY rev $4.4 bln-$4.5 bln vs $4.8 bln prior-view

* Q3 adj EPS $0.38 vs $0.30 year-ago

* Q3 rev $1.11 bln vs $1.27 bln year-ago

* Shares down 11 pct

Aug 1 (Reuters) - Truck parts maker Meritor Inc reported a fall in quarterly revenue and cut its full-year forecast, after sales in Brazil, China and India declined more than expected.

Meritor’s shares, which have dropped more than 60 percent in the last one year, fell 11 percent to $4.16 on the New York Stock Exchange.

“The outlook for China and India is worse than we previously thought,” CEO Chip McClure said on a post-earnings conference call.

Both countries are experiencing a slowdown due to the impact of domestic economic issues as well as the European debt crisis, Meritor said.

The Troy, Michigan-based company, which makes axles, brakes, drivelines and suspension parts, said it expects industry production in China for fiscal 2012 to fall 15 percent from the 10 percent decline it forecast earlier.

Production in India is expected to fall more than 5 percent. “Reduced growth and inflation are driving that forecast,” McClure said.

Sales at the company’s industrial segment -- which gets about 50 percent of its revenue from China and India -- dropped by more than a fifth to $242 million for the third quarter.

Meritor said it also expects industry truck volumes of 153,000 units in South America for fiscal 2012 -- a decline of more than 20 percent from last year.

The company said it expects to earn between 90 cents and $1.15 per share, excluding items, on revenue of between $4.4 billion and $4.5 billion for the full year.

Meritor, which was formerly known as ArvinMeritor Inc, had earlier forecast earnings of $1.08 to $1.39 per share on revenue of $4.8 billion.

Revenue at Meritor’s larger commercial truck segment also fell 10 percent. Total revenue fell 13 percent to $1.11 billion.

Net income from continuing operations rose to $50 million, or 51 cents per share, from $27 million, or 28 cents per share, a year earlier. Excluding items, the company earned 38 cents per share.

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