The eBearing News
November 16, 2001
Federal-Mogul Posts $810 Million Loss
for Third Quarter 2001
copyright © 2001 eBearing Inc.
Federal-Mogul Corporation (Southfield, Michigan), already operating under Chapter 11
bankruptcy protection for its US and UK operations, posted a stunning USD $810 million
loss for the third quarter of 2001. The unexpectedly large loss had analysts publicly
suggesting that F-M management may not have fully disclosed the extent of its problems.
The company declared Chapter 11 bankruptcy on October 1, 2001, the first day of
the fourth quarter. In the third quarter, F-M paid $14.4 million in bankruptcy-related
expenses.
• click here to read the bankruptcy filing article
Sales for 3Q2001 were $1.29 billion, down from $1.43 billion in 2000, and operating
income (sales less COGS and SG&A) fell to only $24.7 million (2% of sales) from
$128.2 million (9% of sales).
One-time adjustments related to restructuring costs, realignments of the values of
ongoing businesses, realignments of the values of continuing businesses, and exchange
rate impacts totaled $857.2 million for the quarter, driving the company to
a reported net loss of $810.1 million.
Federal-Mogul blamed the third quarter earnings decrease on lower sales volumes,
increased employee benefit costs, and cost reduction activities not keeping pace
with the rapid decline in sales.
Sales mix was also to blame for the profitability decline. Original equipment sales
for 3Q2001 were down 8% while aftermarket sales
declined 5% from 2000.
NOTE:
All of the financial results reported here are from press releases.
As such, they are considered to be unofficial financial statements and do not
need to conform to FASB GAAP. Many companies issue press statements which
contain non-GAAP earnings and financial results.
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