Federal-Mogul Holdings Corporation (NASDAQ: FDML) has announced financial results for the second quarter ended June 30, 2014. Net sales for the period were stated as being $1,872 million, an increase of 7% on a continuing operations basis versus the second quarter of 2013.
Operating income improved $10 million, or 11% in Q2 2014 over the same period last year. Operational EBITDA was $180 million or 9.6% of sales in the second quarter of 2014, up from $162 million, or 9.3% of sales, in Q2 2013.
Powertrain Division Results
Federal-Mogul’s Powertrain (PT) division continued to gain market share in all regions with revenue of $1.2 billion, an increase of $90 million or 8% on Q2 2013. Revenue in North America was up 12%, while in Europe revenue was up 5% (on a constant dollar basis). Revenue in ROW was up 11%, driven by strong sales in China where sales increased by 24% compared to Q2 2013.
“The improvements in Federal-Mogul Powertrain division’s Q2 revenue and EBITDA were driven largely by volume increases and market share gains across all regions,” stated Rainer Jueckstock, Federal-Mogul Co-CEO and CEO, Powertrain Division. “We also continue to make operational progress by restructuring and realigning our manufacturing footprint to improve our cost competitiveness.”
Motorparts Division Results
Federal-Mogul’s Motorparts division reported revenue of $791 million in Q2 2014 compared to $761 million in Q2 2013, with negligible exchange impact. When excluding the impact of sales related to the Affinia acquisition which closed during the quarter, revenue was essentially flat. Sales in the US and Canada aftermarket increased by 4%. This was offset by a 6% decline in European sales on a constant dollar basis.
“We continued to make progress on our strategic priorities during the second quarter. Specifically, we secured locations and started the build-out of full product line regional distribution centres in Southern California and Eastern Pennsylvania. We also began implementation of a new, web-based inventory management system; invested in our sales force and technical training programs; and launched a new product development process,” stated Dan Ninivaggi, Federal-Mogul Co-CEO and CEO, Motorparts Division. “In addition, we completed the Affinia chassis acquisition on May 1 and, shortly after quarter-end, closed the Honeywell brake acquisition. At the same time, we have recruited several new senior executives and streamlined our organizational structure.”
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