SOUTHFIELD, Mich. -- Federal-Mogul today reported its first quarter 2010 financial performance, with sales of $1.5 billion, 20 percent higher versus the first quarter of 2009, strong gross margin of $254 million or 17.1 percent and net income of $15 million or 15 cents per diluted share.

Excluding a charge resulting from the Venezuelan currency devaluation, the company realized adjusted net income of $35 million or 35 cents per share for the first quarter of 2010. Analysts' consensus earnings expectation for the first quarter of 2010 was 22 cents per share. The company's operational EBITDA nearly doubled versus the prior year to $138 million and cash flow strongly improved to $50 million during the quarter.

"Federal-Mogul's strong financial results in the first quarter of 2010 demonstrate the benefit of an improving industry and the positive impact of our customer, market and product diversification, combined with the company's ability to leverage its lower operating cost resulting from restructuring initiatives in 2009," said Jose Maria Alapont, president and CEO. "We nearly doubled our EBITDA during the first quarter of 2010 on a sales increase of 20 percent, demonstrating our capability to convert incremental revenue to greater profitability."

The company's stronger sales performance reflected an overall improvement in global automotive original equipment market demand. Federal-Mogul's sales of $1,489 million in the first quarter of 2010 improved 20 percent, versus $1,238 million recorded during the same period one year ago. Federal-Mogul said it realized market share gains in all three of its business units serving the original equipment automakers. The company's sales were higher in all regions, with Asia-Pacific original equipment sales up 98 percent in the quarter versus the prior year, as compared to original equipment market expansion in the region of 46 percent during the first quarter of 2010 versus the first quarter of 2009.

Gross margin in the first quarter of 2010 was $254 million or 17.1 percent of sales versus $158 million or 12.8 percent in the first quarter of 2009. Federal-Mogul recorded SG&A expenses of $184 million or 12.4 percent of sales during the first quarter of 2010, versus $184 million or 14.9 percent of sales in the same period of 2009. The company has a strong track record of SG&A improvement and continues to develop plans to further leverage existing staff support costs as the traditional automotive markets strengthen and the company implements plans to grow in Energy, Industrial and Transport market segments, where its core products can be applied to new product categories.

In the first quarter, the company reported net income of $15 million or 15 cents per diluted share or $35 million or 35 cents per share excluding the impact of the charge to recognize the Venezuelan currency devaluation. In the first quarter of 2009, the company reported a net loss of $(101) million.

Operational EBITDA in the first quarter of 2010 was $138 million or 9.3 percent of sales, nearly double the $70 million or 5.7 percent of sales reported in the first quarter of 2009. Operational EBITDA for the first quarter 2010, excluding the impact of the currency devaluation in Venezuela, was $158 million or 10.6 percent of sales.

Cash flow in the first quarter of 2010 was positive at $50 million, a strong improvement versus cash usage of $(196) million in the first quarter of 2009. This quarter's performance, when coupled with strong cash management in previous quarters, brings cash flow for the last 12 months to more than $400 million. The ability to generate significant cash and deliver earnings during a distressed economic period is indicative of the strength of the company's sustainable global profitable growth strategy, the company noted.

Federal-Mogul received, in the first quarter of 2010, seven recognition awards from global customers including Caterpillar, Cummins, Ford, General Motors, Honda, John Deere and Toyota. In addition, five industry-leading Federal-Mogul innovations were recently recognized at the 2010 Automotive News PACE Awards. PACE is an industry award given by a panel of independent judges that review leading innovations submitted by automotive industry suppliers. Federal-Mogul won PACE Awards in three separate product technology and process innovation categories, more than any other company in the 2010 competition. The company's DuraBowl piston, windshield wiper connection system and High Precision Electro-Erosion Machining Process were each honored with a PACE Award for industry-leading innovation and successful commercial application. Federal-Mogul has received a total of seven PACE awards in recent years.

"Our strong first quarter earnings and cash flow performance shows that we are on the right track,” Alapont said. “The company's commitment to leading technology and innovation to drive this growth was recently recognized through the PACE Awards. Our customers and now independent industry judges have recognized Federal-Mogul for developing innovative solutions to solve the industry's most pressing challenges for fuel efficiency, emissions reduction and improved vehicle safety. Through strong financial performance, customer recognition and leading technology accomplishments we are demonstrating our capability to generate sustainable global profitable growth."