Southfield, Michigan – Federal-Mogul Holdings Corp., the diversified auto supplier controlled by longtime Wall Street investor Carl Icahn, posted a $31 million profit in the second quarter, up 41 percent from the year-earlier period, driven by a gain in its powertrain unit.
The increase overcame lower aftermarket sales and the negative impact of currency exchange rates.
The supplier said it posted net sales of $1.92 billion in the second quarter, a 2 percent dip from the year-earlier period.
Federal-Mogul’s powertrain unit generated revenue of $1.172 billion in the second quarter, up slightly from $1.167 billion from the year-earlier period. Federal-Mogul credited the rise to an increase in sales partially offset by $7 million from unfavorable currency exchange rates. The company also credited increased sales from the acquisition of a valvetrain business.
“While we are pleased with our overall results for the quarter, our sales were relatively flat during this period,” Rainer Jueckstock, CEO of Federal-Mogul’s powertrain unit, said in a statement.
Revenue at the company’s aftermarket, or motor parts, division fell 6 percent to $818 million on an $8 million hit from currency exchange rate fluctuations. The supplier’s North American aftermarket sales decreased by 10 percent in the second quarter.
Daniel Ninivaggi, CEO of the motor parts unit, called second-quarter sales “somewhat disappointing” but noted “strategic initiatives,” such as the openings of new distribution centers in Belgium and China, the acquisition of a filter manufacturing business in Mexico and expansion of the “Tech First” technical training and support platform as highlights for the quarter.
In January, Federal-Mogul decided not to spin off its motor parts division as it had planned.
Icahn, meanwhile, aims to acquire the remaining 18 percent of the company that he doesn’t already own. On Wednesday, Federal-Mogul said the “transaction process” with Icahn Enterprises “remains ongoing.”
In June, Icahn said in a letter to the board of directors he would increase his offer to $8 per share, up from the $7-per-share offer he made in February.
Icahn won a $1.03 billion bidding war for auto parts retail chain Pep Boys, which has 800 locations, in December.
Federal-Mogul ranks No. 47 on Automotive News’ list of the 100 largest global suppliers with estimated worldwide parts sales to auto makers.