Federal-Mogul Announces First Quarter Results

Federal-Mogul Corporation today announced first quarter 2001 sales of $1,451 million U.S. compared to $1,644 million U.S. in 2000.
In line with expectations announced on March 28, Federal-Mogul reported a first quarter loss of $(.60) per share from operations versus earnings of $.86 per share from operations in 2000. Excluded from earnings from operations were charges for restructuring and impairment. Including these items, Federal-Mogul reported a first quarter loss of $(.89) per share compared to net earnings of $.18 in 2000. Cash flow from operations which includes capital expenditures, restructuring, and asbestos payments was a usage of $146 million.
By region, the Americas and Asia reported first quarter sales of $937 million compared to $1,102 million in 2000. Europe and Africa reported sales of $514 million compared to $542 million in 2000.
The original equipment market represented 58% of the company’s global sales with the replacement market accounting for 42% of first quarter sales. Excluding exchange impacts, original equipment sales were down by 10% and aftermarket sales were down 7% compared to first quarter 2000.
“North American demand from both our aftermarket and original equipment customers was significantly lower. Although we intensified efforts to reduce our cost structure, we were not able to match the pace and degree of our customer’s volume declines. A bright spot this quarter was our cash usage, which historically has run much higher in the first quarter than it did this year,” said Frank Macher, chief executive officer.
“We are making progress on our efforts to run lean and competitive. Our drive to be low cost, as evidenced by our announced agreement to acquire WSK Gorzyce to expand our piston manufacturing into Poland, reflects our company’s global commitment to operate more efficiently.”
Federal-Mogul’s asbestos liability payments were on track as planned at $88 million, down from fourth quarter 2000 levels.
“As promised, we have changed our asbestos management strategy and are actively pursuing some form of legislative relief,” said Macher. “Our outlook for estimated asbestos claim payments remains $350 million in 2001.”