DETROIT -- Federal-Mogul Corp. reported net income of $56 million for the second quarter, its first quarterly profit since the start of 2012, largely due to downsizing over the past 18 months. The news sent the company's stock soaring more than 31 percent today.
The company posted a net loss of $56 million during the same quarter last year. Revenue rose 5.8 percent in the recent quarter to $1.8 billion, Federal-Mogul said today in a statement.
Federal-Mogul shares skyrocketed 31 percent to close at $13.95 a share. About 81 percent of the shares are controlled by longtime Wall Street investor Carl Icahn.
In another development, investor Mario Gabelli boosted his stake in the company to more than 5 percent. Gabelli, in a regulatory filing just before the market closed, said he raised his stake to 7.52 million shares, or 5.01 percent. Gabelli held a 3.14 percent stake as of March 31, according to data compiled by Bloomberg.
The company also said today it completed a shareholder rights offering on July 9 that generated $500 million in proceeds.
Federal-Mogul's recent cost-cutting strategy included the closure or downsizing of seven plants. In June, the company sold its connecting rod and camshaft business to Addison, Ill.-based JD Norman Industries Inc.
The measures helped Federal-Mogul generate cash flow of $73 million in the second quarter, up from negative cash flow of $198 million in the first quarter of this year.
"Federal-Mogul's second quarter results show the benefit of cost reductions and restructuring actions implemented to eliminate loss-making units and improve overall operating leverage," Rainer Jueckstock, Federal-Mogul co-CEO and CEO of its powertrain segment, said in a statement. "The cash flow in Q2 2013 is also an important sign of improved working capital stability. While the results are encouraging, we are continuing to implement restructuring actions to raise capacity utilization and improve operating performance."
The direct and aftermarket supplier has struggled to remain profitable despite an upswing in the North American auto market. Federal-Mogul reported a net loss of $34 million in the first quarter of this year, its fourth straight unprofitable quarter.
In May, Jueckstock's co-CEO, Michael Broderick, resigned less than a year after joining the company. Broderick was replaced by former Advance Auto Parts Inc. COO Kevin Freeland.
Bloomberg contributed to this report.