Federal-Mogul Corp. has penned an agreement to sell its connecting rod and camshaft business to JD Norman Industries, Inc. The transaction includes the sale of Federal-Mogul’s connecting rod machining plant in Windsor, Canada and the camshaft foundry plant in Lydney, UK.
Federal-Mogul’s customers including General Motors Company (GM - Free Report) , Ford Motor Co. (F - Free Report) , Chrysler, Linamar, Jaguar, Land Rover, PSA and others value the Windsor and Lydney plants because of their high-quality operations. JD Norman’s industrial experience, business strategy and relationships with key customers will favorably impact these plants.
JD Norman Industries, a diversified manufacturer of metal components and systems with operations in the U.S, Mexico, Canada and the United Kingdom, will work for a smooth transition for customers, employees and other stakeholders. It will also retain Federal-Mogul’s 230 associates currently working in these facilities.
Federal-Mogul is a leading global supplier of powertrain, chassis and safety technologies. The company’s leading technology and innovation, lean manufacturing expertise, as well as marketing and distribution deliver world-class products, brands and services at a competitive cost. Currently, it retains a Zacks Rank #3 (Hold).
Federal-Mogul posted a 45.7% fall in earnings per share to 19 cents in the first quarter of 2013 from 35 cents in the corresponding quarter last year. However, earnings per share comfortably outpaced the Zacks Consensus Estimate of a loss of 29 cents. Net income declined 43.2% to $21.0 million from $37.0 million in the year-ago quarter.
Revenues also decreased 2.4% to $1.69 billion in the reported quarter, missing the Zacks Consensus Estimate of $1.75 billion. The year-over-decline was due to lower European light vehicle shipment and reduced global commercial vehicle production.
Magna International Inc. (MGA - Free Report) , a Zacks Rank #1 (Strong Buy) stock, is performing well in the industry where Federal-Mogul operates.