Federal-Mogul has reported strong second quarter financial results with net income up to USD49m from USD7m last year.
The result beat analyst expectations.
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Sales in the second quarter reached US$1.6bn, 23% ahead of the same quarter last year.
“Federal-Mogul’s results in the second quarter of 2010 show our ability to deliver strong financial performance by converting incremental revenue to profitability due to our continued focus on efficiently managing our cost base established during 2009,” said Jose Maria Alapont, president and chief executive officer.
“Federal-Mogul’s margins, both in absolute terms and as a percentage of sales, are significantly higher than a year ago and we have strongly improved year-over-year cash flow.”
“Federal-Mogul’s margins, both in absolute terms and as a percentage of sales, are significantly higher than a year ago and we have strongly improved year-over-year cash flow.”
For the first half of 2010, compared to the same period one year ago, Federal-Mogul converted additional sales of $545 million into additional net income of $161 million, a conversion rate of 30 percent.
The company said that its stronger sales performance is the result of market share gains in all regions and markets, on top of a significant improvement in global automotive original equipment light vehicle and commercial vehicle market demand. Federal-Mogul’s growth in key developing markets continued strong with year-over-year growth of 63 percent in China and 20 percent in India.
“Our strong second quarter earnings and cash flow performance demonstrates once again that we are on the right track,” Alapont said. “The company’s commitment to leading technology and innovation to drive growth in developing markets was recently confirmed with the official grand opening of our Asia Pacific Headquarters and Technical Center. Federal-Mogul’s 100,000 square foot facility in Shanghai contains some of the most sophisticated development, testing and analysis equipment in our global engineering network. We already manufacture in Asia Pacific the main products in our portfolio within our 21 manufacturing sites located in the region, supporting leading light vehicle, heavy-duty and aftermarket customers. We remain committed to enhancing and developing our presence in the Asia Pacific region.”
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