Meritor trims third quarter revenue, earnings outlook

TROY (AP) -- Auto supplier Meritor Inc.'s stock tumbled last Thursday after it trimmed its fiscal third-quarter outlook for revenue, adjusted earnings and cash flow. The company said it expects revenue will range from $1.28 billion to $1.29 billion, down from the $1.3 billion to $1.375 billion estimate range it issued in May. On average, analysts were looking for $1.31 billion in revenue, according to FactSet. Management anticipates third-quarter sales will be up between 7 percent and 8 percent compared with the second quarter. Meritor also projects adjusted earnings will range between $100 million and $104 million. The company's May forecast called for its adjusted earnings to go as high as $110 million. The company also said it expects free cash flow to be breakeven, down from an earlier projection of slightly positive. The change is due primarily to investments in inventory, the company said. Meritor is scheduled to report third-quarter financial results on Aug. 2. Shares fell 66 cents, or 4.2 percent, to $14.98 in afternoon trading. Published: Mon, Jul 25, 2011