Icahn's Federal-Mogul Falls as Currency Swings Hurt Profitby
Exchange rates cut quarterly revenue in powertrain unit
Icahn owned 82 percent of parts supplier as of June 30
Federal-Mogul Holdings Corp., the auto-parts supplier controlled by Carl Icahn, fell after currency swings drove declines in third-quarter profit and sales.
The shares dropped 1.5 percent to $7.64 at the close in New York. The stock has declined 53 percent this year.
Federal-Mogul reported that adjusted profit slid to $28 million from $32 million a year earlier. Earnings per share on that basis were 17 cents, trailing the two estimates of 27 cents and 21 cents compiled by Bloomberg. The Southfield, Michigan-based company, which gets about two-thirds of its revenue outside the U.S., said Wednesday that sales fell 2.5 percent to $1.82 billion but rose 7 percent excluding currency effects.
The company said exchange rates hurt sales in its powertrain unit by about $106 million. The unit, which makes piston rings and engine valves, had total revenue of $1.08 billion.
Icahn owned 82 percent of Federal-Mogul’s outstanding shares as of June 30, according to data compiled by Bloomberg. The billionaire investor, known for challenging corporate boards, said Wednesday that American International Group Inc. should split into three companies, one selling property-casualty coverage, another selling life insurance and a third backing mortgages. He said he has a “large stake” in the insurer.