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What: Shares of auto parts maker Federal-Mogul (NASDAQ:FDML) hit the brakes today, falling as much as 12%, after coming up short on its earnings report.
So what: Both top and bottom lines dropped off from a year ago and missed estimates. An EPS loss of $0.11 a share was way off the $0.25 profit that analysts were expecting. The European market was particularly weak "due to the overall market downturn," as constant dollar sales fell by 7% and were even lower when accounting for currency translation effects. Sales in North America, meanwhile, were up by 2%.
Now what: The auto market is highly cyclical, so the Federal-Mogul troubles in Europe shouldn't come as a big surprise. Automakers GM and Ford have also been posting losses on the continent recently. Analysts had already scaled back estimates for Federal-Mogul in the preceding weeks, yet were still wildly off the mark. With no sign of the European economy improving, it seems like the powertrain supplier is likely to keep suffering. Today was a new 52-week low, but there's plenty of reason to believe the stock could fall further.
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Jeremy Bowman has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.