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UPDATE 1-Meritor reports lower 4th-quarter profit, to cut jobs
November 14, 2012 / 4:45 PM / in 5 years

UPDATE 1-Meritor reports lower 4th-quarter profit, to cut jobs

* To cut 800 jobs

* Fourth-quarter revenue falls 19 pct

* Earnings from cont ops $0.04/share vs $0.40 last year

Nov 14 (Reuters) - Truck parts maker Meritor Inc reported a fall in quarterly profit due to lower sales in India, China and Brazil, and said it will cut 800 jobs globally.

The Troy, Michigan-based company said on Wednesday that it expected cost savings from the job cuts in the second quarter.

Meritor, which has about 10,000 full-time employees, said it would cut 50 salaried staff and 750 production workers.

The company, formerly known as ArvinMeritor Inc, makes axles, brakes, drivelines and suspension parts.

Reduced infrastructure spending and higher levels of dealer inventory in China have led to lower production of cranes, loaders and other excavating equipment, Chief Executive Chip McClure said on a conference call with analysts on Wednesday.

Commercial truck production in North America is expected to fall 12 percent to 420,000 units in the fiscal year started Oct. 1, while off-highway production in China is likely to drop 8 percent to 10 percent, McClure said.

Meritor’s shares were down 3 percent at $4.12 on the New York Stock Exchange on Wednesday morning. They have halved in value in the last seven months.

Excluding items, Meritor said it expects to earn between 25 cents and 35 cents per share from continuing operations in fiscal 2013, reflecting lower pretax earnings and a higher effective tax rate.

It expects full-year revenue of about $4 billion.

The company said it expects effective tax rate in fiscal 2013 to be about 50 percent, compared with 41 percent in 2012.

In fiscal 2012, the company earned $1.14 per share from continuing operations, excluding items, on revenue of $4.42 billion.

Sales at Meritor’s industrial business, which gets about half of its revenue from China and India, dropped 17 percent in the quarter ended September.

Meritor said its profit was also dented by an $18 million charge associated with a change in actuarial assumptions for asbestos-related liabilities.

Net income from continuing operations fell to $4 million, or 4 cents per share, in the fourth quarter from $38 million, or 40 cents per share, a year earlier.

Excluding items, Meritor earned 32 cents per share.

Fourth-quarter revenue dropped 19 percent to $986 million.

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