Aggressive Growth: Federal-Mogul Corp (FDML)

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

Federal-Mogul Corp (FDML): Free Stock Analysis Report

About Bill Wilton 56 Articles

Affiliation: Zacks Investment Research

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.

Visit: Zacks Investment Research

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