Federal-Mogul today (28 July) announced higher sales and improved financial results in Q2 2011 compared to the same period last year.

The company reported sales of US$1.8bn, a 13% increase versus the prior year, or 6% in constant dollar terms. Gross margin was US$299m or 16.6% of sales, an increase of US$25m compared to Q2 2010.

Net income for the second quarter 2011 was U$64m or US$0.64 per diluted share, compared to US$49m million or US$0.49 per diluted share in Q2 2010, a 31% rise.

Operational EBITDA was US$200m or 11.1% of sales during the quarter and cash flow was US$22m.

“Federal-Mogul had a very solid Q2 and continues to perform well, with strongly increasing customer demand for our technology and innovation in all vehicle market segments,” said president and CEO Jose Maria Alapont. “Once again our results compare favourably to analysts’ expectations.”

Federal-Mogul says its growth was driven by market share gains in all original equipment business units combined with higher global original equipment market demand.

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Original equipment sales increased 23%, or 14% on a constant dollar basis, with China up 19% and India up 28%.

Original equipment sales represented 66% of the company’s total sales in the quarter.

Federal-Mogul’s aftermarket sales in Q2 2011 declined by 3%, or 7% on a constant dollar basis, with strong growth in developing markets, led by China up 21% and India up 26%. The company’s aftermarket sales in Europe, China, India and other markets now represent 40% of Federal-Mogul’s global aftermarket sales.

“Federal-Mogul had solid profit improvement in the second quarter 2011, and implemented additional effective actions this year that enabled the company to fully offset adverse materials cost impact through supplier negotiations, additional operating efficiency and customer price recoveries,” said Alapont.

The company also announced it has determined, based on its previously announced review of strategic alternatives, that without ruling out other opportunities that may present themselves, it intends at the present time to concentrate primarily on organic growth and strategic acquisitions.