Federal-Mogul rides cost cuts, market share gains to $49M 2Q profit

Federal-Mogul 2Q profit jumps; revenue up 23 pct.

SOUTHFIELD, Mich. — Vehicle parts maker Federal-Mogul Corp. reported a $49 million profit for the second quarter on Thursday as the company capitalized on its global restructuring while the auto industry continued to recover from the recession.

The Southfield, Mich., supplier of powertrain and safety components also reported a 23 percent increase in revenue as it gained market share in all regions.

The results beat Wall Street expectations and Federal Mogul shares rose 58 cents, or 3.6 percent, to $16.58 in morning trading.

CEO Jose Maria Alapont said in an interview that the company is well-positioned for whatever happens in the second half of the year because of restructuring steps taken during the recession. Many industry analysts and automakers have reduced their U.S. sales forecasts for the second half of the year.

Federal-Mogul, Alapont said, cut sales and administrative expenses by $5 million to $165 million from the second quarter of 2009 to this year. The cuts knocked the expenses down from 13 percent of revenue in 2009 to 10.3 percent in the second quarter, he said.

“Consciously we did a strategy that allows us to keep performing whether the markets remain equally strong or start slowing down,” he said.

So far, though, Federal-Mogul is on a strong run, Alapont said, because its product portfolio is diverse, hitting autos and commercial vehicles as well as industrial transportation.

The company reported net income of 49 cents per share for the April-June period, far above the $3 million, or 3 cents per share, a year ago.

Revenue rose to $1.6 billion from $1.3 billion a year ago.

Analysts polled by Thomson Reuters expected earnings of 32 cents per share on revenue of $1.5 billion.