TSC Ratings' Updates: ArvinMeritor

The revenue growth came in higher than the industry average of 4.0%. Since the same quarter one year prior, revenue rose by 20.5%. Growth in the company's revenue appears to have helped boost the earnings per share.

The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the auto components industry. The net income increased by 162.8% when compared with the same quarter one year prior, rising from -$70.00 million to $44.00 million.

Net operating cash flow has significantly increased by 189.76% to $114.00 million when compared with the same quarter last year. In addition, ARM has also vastly surpassed the industry average cash-flow growth rate of 34.15%.

ARM reported significant earnings per share improvement in the most-recent quarter compared with the same quarter a year ago. This company has reported somewhat volatile earnings recently. But we feel it is poised for EPS growth in the coming year. During the past fiscal year, ARM swung to a loss, reporting -43 cents vs. $1.61 in the prior year. This year, the market expects an improvement in earnings ($1.55 vs. -43 cents).

The return on equity has improved slightly when compared with the same quarter one year prior. This can be construed as a modest strength in the organization. When compared with other companies in the auto components industry and the overall market, ARM's return on equity is below that of both the industry average and the S&P 500.

ARM had been rated a hold since May 1, 2008.