Federal-Mogul has reported solid year-over-year results with third quarter
sales of $1,692 million, gross margin of $279 million, pre-tax earnings of $22
million and net income of $4 million. Cash flow in the third quarter 2008
improved to $25 million versus a negative cash flow of $(114) million in the
same period of 2007.
The
company said these sales and operating results are comparable to year-ago
levels, however third quarter 2008 performance was attained in a far more
challenging market environment than in the third quarter of the prior year.
"The
third quarter was increasingly difficult for the automotive industry,” said
Jose Maria Alapont, Federal-Mogul president and CEO. “Our strong operating fundamentals
served to limit the negative impact of the market downturn. As a result of our
diversification, Federal-Mogul realized continued strong sales. The company’s
decisive response to the declining global automotive market, including sharp
cuts in discretionary spending, coupled with a global restructuring program designed
to eliminate excess operating capacity, reduce requirements for operations
support and streamline SG&A, enabled Federal-Mogul to realize another
profitable quarter and positioned the company for this challenging market."
Federal-Mogul,
in Q3 2008, recorded a gross margin of $279 million or 16.5 percent of sales,
compared to the same results, $279 million or 16.5 percent of sales in Q3 2007.
The company’s Operational EBITDA was $178 million or 10.5 percent of sales,
compared to $166 million or 9.8 percent of sales during the same period in
2007, representing an increase of $12 million or seven percent. The company
recorded pre-tax income of $22 million compared to $7 million in the third
quarter of 2007.
Federal-Mogul reported net income of $4 million or earnings
per share of $0.04, down from $14 million in the third quarter 2007, due to
non-recurrence of tax benefits of $24 million in Q3 2007. Selling, General and
Administrative (SG&A) expenses were reduced to 11.3 percent of sales during
the quarter, compared to 12.3 percent of sales in the same period of 2007. The
company realized a reduction in SG&A expense of $22 million, partially
offset by foreign currency exchange impact of $6 million, resulting in a net improvement
of $16 million.
"During
these challenging times, consistent execution of the company’s proven strategy
for sustainable global profitable growth helped to offset the market downturn
and strengthen overall performance," explained Alapont. "Federal-Mogul
has an established track record for restructuring to sustain operating performance
and, furthermore, we possess a solid capital structure, considerable liquidity
and a favorable bank financing package. This should enable us to retain our
leading market position and prepare the company for future growth opportunities
through organic growth or market consolidation," he added.
"We
will continue to focus on our strong fundamentals, including world-class
engineering and manufacturing with a cost-competitive global footprint; leading
technology and innovation in vehicle and industrial products for fuel economy,
alternative energies, emissions reduction and safety systems; with long-term
customer relationships built on excellence in products and services, supply
chain and operating performance," Alapont continued.
"Federal-Mogul
remains a strong company with profitable financial performance, a solid balance
sheet, considerable liquidity, favorable financing and a diverse portfolio of
leading products and customers. Our sustainable global profitable growth
strategy continues to guide the company as we prepare for challenging market
conditions during the remainder of 2008 and in 2009," Alapont said.
