ERJ staff report (AN)
Detroit, Michigan -- Automotive supplier Federal-Mogul Corp. has reported a fourth-quarter net loss after a $304 million one-time impairment charge caused by a drop in the value of some of its product lines.
The suburban Detroit supplier's fourth-quarter net loss was $239 million, or $2.42 a share, compared with a profit of $45 million, or 45 cents a share, a year ago. Revenue rose 5 percent from the fourth quarter of 2010 to $1.7 billion.
Removing one-time items, Federal-Mogul reported a profit of $51 million, or 51 cents per share, for the quarter, up from $38 million, or 38 cents per share, in the year-ago period.
Analysts had expected adjusted earnings per share of 44 cents and sales of $1.75 billion, according to Thomson Reuters.
Federal-Mogul said the one-time charge, which came from writing down the â€œgoodwillâ€ value of certain assets, would probably have been offset by increased values of other business units, such as powertrain. But accounting rules â€œdo not permit the recognition of gains in the value of one reporting unit to offset impairment charges in another reporting unit,â€ the company said in a statement.
For 2011, Federal-Mogul reported a net loss of $90 million compared with net income of $161 million in 2010. When adjusting out one-time gains and charges, Federal-Mogul said it posted net income of $203 million in 2011 compared with $134 million in 2010.
Revenues for the year increased 11 percent $6.9 billion.
The company said the results reflected an increase in sales to original equipment customers and offset costs from higher volumes and raw materials.
Federal-Mogul's original equipment sales were a company record of $4.6 billion for 2011, an increase of 18 percent from a year ago.
The company makes pistons, rings, liners, bearings, gaskets, seals, heat shields and friction materials.
From Automotive News (A Crain publication)
Press release from Federal Mogul