Federal-Mogul Corp (FDML) topped Wall Street expectations for a third time last quarter and is showing improvements in all areas on its operations. Expansions are going strong and analysts are raising their estimates.
Company Description
Federal-Mogul Corp supplies powertrain and safety products for OEMs of cars, commercial, marine, agriculture and other vehicles.
Big Surprise
On Jul 29 Federal-Mogul reported second-quarter results that showed a 23% improvement in sales, to $1.6 billion. Each operating segment saw increases in every region for the quarter.
Net income came in at $49 million, which breaks down to 49 cents per share. Heading into the report, the Zacks Consensus Estimate was 32 cents, making this a 53% surprise.
Expansion Going Well
Federal-Mogul acquired the Daros Group to expand its energy, industrial and transport products. Additionally, the company opened a new facility in Asia to enhance its development, testing and analysis equipment for its engineering network.
Estimates on the Rise
Following the earnings release, the Zacks Consensus Estimate for full-year 2010 jumped 29 cents to $1.23. Next year’s estimates are averaging $1.72, up 12 cents on the news and 24 cents in the past 2 months.
Federal-Mogul lost 24 cents last year giving the company excellent growth rates.
The Chart
Shares of FDML have dipped with the overall market as of late, but this looks like a nice entry point. The stochastic is showing that the stock is hitting “oversold” territory and shares are going for about
Bill Wilton is the Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Growth Trader service
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