DNZOY Denso Corp Ltd (PK)

Federal-Mogul Corp. (FDML) posted a 45.7% fall in earnings per share to 19 cents in the first quarter of 2013 from 35 cents in the corresponding quarter last year. However, earnings per share comfortably outpaced the Zacks Consensus Estimate of a loss of 29 cents. Net income declined 43.2% to $21.0 million from $37.0 million in the year-ago quarter.

Revenues also decreased 2.4% to $1.69 billion in the reported quarter, missing the Zacks Consensus Estimate of $1.75 billion. The year-over-decline was due to lower European light vehicle shipment and reduced global commercial vehicle production.

Segment Results

Revenues from the Powertrain Segment went down 2% to $1.1 billion. Higher revenues from North America were offset by lower light vehicle and commercial vehicle production in the region. The company also recorded lower revenues from European operation together with lower vehicle production.

Operational EBITDA of the Powertrain Segment declined 15.9% to $90.0 million. However, it was higher than the fourth quarter results based on favorable impacts of cost reduction and portfolio restructuring actions.

Revenues from the Vehicle Components Segment declined 2.3% to $737.0 million from $754.0 million a year ago, driven by a 7% decline in revenues from North America, partially offset by higher revenues from European operation. Operational EBITDA of Vehicle Components Segment declined 12.1% to $51.0 million from $58.0 million in the first quarter of 2012, due to lower sales volume.

Financial Details

Federal-Mogul had cash and cash equivalents of $269.0 million as of Mar 31, 2013, compared with $467.0 million as of Dec 31, 2012. Total debt remained flat at $2.8 billion as of Mar 31, 2013.

In the first quarter of 2013, cash outflow from operating activities amounted to $50.0 million, compared with cash inflow of $5.0 million in the same period of 2012. Capital expenditure amounted to $93.0 million compared with $130.0 million a year ago.

Our Take

Federal-Mogul is a leading global supplier of powertrain, chassis and safety technologies. The company’s leading technology and innovation, lean manufacturing expertise, as well as marketing and distribution deliver world-class products, brands and services with quality excellence at a competitive cost. Currently, it retains a Zacks Rank #3 (Hold).

Some other stocks that are performing well in the industry where Federal-Mogul operates include Gentherm Incorporated (THRM), Visteon Corp. (VC) and Denso Corp. (DNZOY). All these companies carry a Zacks Rank #1 (Strong Buy).
 

 
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