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What: Shares of Federal-Mogul were stalling out today, falling as much as 14% after reporting a weak quarterly earnings report.
So what: The maker of powertrains and other auto components suffered a similar fate as other industry peers as weakness in Europe drove the company to a loss once again. The auto-parts maker said it plans to restructure through 2015, and will shift capacity from Western Europe to cheaper locales like Asia, Mexico, and Eastern Europe. For the quarter, Federal-Mogul posted an adjusted loss of $0.41 a share against expectations of a $0.15 per-share profit. Revenue, meanwhile, fell 3% to $1.6 billion on a 13% decline in industrial engine production and a 14% drop in European light vehicle production.
Now what: Today's drop is only the latest folly for Federal-Mogul, which has lost more than half its value in the past year. Including all charges, the company lost $1.18 per share for 2012, and with restructuring likely to continue hampering the bottom line until 2015, consistent profitability may be at least a few quarters away. The major carmakers have signaled that European conditions should improve by the second half of the year. I might check back on Federal-Mogul then. You can do the same by adding the stock to your Watchlist here .
The article Why Federal-Mogul Shares Plunged originally appeared on Fool.com.
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