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How Did Federal-Mogul Perform in 4Q15?

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Price movement of Federal-Mogul

Federal-Mogul Holdings (FDML) rose by 64.1% to close at $8.17 per share at the end of the first week of March 2016. The price movement on a weekly, monthly, and year-to-date (or YTD) basis is 64.1%, 100.3%, and 19.3%, respectively.

Currently, FDML is trading 66.6% above its 20-day moving average, 55.3% above its 50-day moving average, and 1.8% below its 200-day moving average.

The iShares Russell 2000 ETF (IWM) invests 0.02% of its holdings in Federal-Mogul. The ETF tracks a market-cap-weighted index of US small-cap stocks. The index selects stocks ranked 1,001–3,000 by market cap. The YTD price movement of IWM was -5.9% as of March 3, 2016.

The market caps of FDML’s competitors are as follows:

  • Cummins (CMI): $17.8 billion
  • Lear Corporation (LEA): $8.1 billion
  • Timken (TKR): $2.5 billion
  • Dana Holding (DAN): $2.0 billion
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Performance of Federal-Mogul in fiscal 4Q15 and fiscal 2015

Federal-Mogul reported fiscal 4Q15 net sales of $1,798.0 million, a rise of 0.17% compared to the net sales of $1,795.0 million in fiscal 4Q14. Its net income and EPS (earnings per share) rose to -$58.0 million and -$0.36, respectively, in fiscal 4Q15 compared to -$185.0 million and -$1.24, respectively, in fiscal 4Q14. It reported non-GAAP operational EBITDA (earnings before interest, tax, depreciation, and amortization) of $164.0 million in fiscal 4Q15, a rise of 37.8% compared to fiscal 4Q14.

Fiscal 2015 results

In fiscal 2015, FDML reported net sales of $7,419.0 million, a rise of 1.4% YoY (year-over-year). Its net income and EPS rose to -$110.0 million and -$0.67, respectively, in fiscal 2015 compared to -$168.0 million and -$1.12, respectively, in fiscal 2014.

Meanwhile, its cash and cash equivalents fell by 41.6%, and inventories rose by 10.5% in fiscal 2015. Its current ratio fell to 1.70x, and its long-term debt-to-equity ratio rose to 3.2x in fiscal 2015 compared to a current ratio and long-term debt-to-equity ratio of 1.74x and 2.8x, respectively, in fiscal 2014.

The price-to-sales and price-to-book value ratios of Federal-Mogul are 0.19x and 1.8x, respectively, as of March 4, 2016.

On February 29, 2016, the company received a proposal from Icahn Enterprises (or IEP) to purchase shares of Federal-Mogul common stock not owned by IEP in a merger transaction in which the company’s shareholders would receive $7 in cash per share.

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