Friday, October 18

Tenneco’s Earnings Down, Along With Share Price


DETROIT, Mich.–Tenneco Inc. (TEN-NYSE) reported first-quarter 2019 results, with adjusted earnings per share of 52 cents, missing the Zacks Consensus Estimate of 94 cents by a wide margin. Also, the company’s bottom line declined from the prior-year quarter figure of $1.62.

In the last six months, Tenneco shares have fallen from $36.09 to $12.75.

In the reported quarter, Tenneco’s adjusted net income was $42 million compared with $83 million in first-quarter 2018.

Quarterly revenues rose 74% year over year to $4.5 billion, almost in line with the Zacks Consensus Estimate. On a constant-currency basis, organic revenues rose 4%, and net revenue growth from acquisitions and divestitures was 75%, partly offset by 5% negative impact of currency translation.

Price, Consensus and EPS Surprise

Adjusted EBITDA (income before interest expenses, income taxes, noncontrolling interests and depreciation, and amortization) was $327 million compared with $212 million recorded in the prior-year quarter. Apart from the acquired Federal-Mogul business, the figure includes weaker aftermarket, and China OE volumes and related operational inefficiencies.

Segment Results

After the inclusion of Federal-Mogul business, Tenneco operates under four segments, consisting of Clean Air, Ride Performance, Powertrain and Motorparts. The Motorparts segment reflects the company’s historical Aftermarket units along with the Motorparts aftermarket business of Federal-Mogul. Further, Ride Performance division comprises Tenneco’s historical Ride Performance segment and Motorparts OE business of the acquired Federal-Mogul.

The Clean Air division’s first-quarter revenues were $1.78 billion compared with the year-earlier figure of $1.76 billion.

Revenues in the Ride Performance division were $733 million compared with $513 million recorded in the year-ago quarter.

The Powertrain division’s first-quarter revenues were $1.2 billion.

The Motorparts division’s revenues were $797 million, up from $312 million generated in first-quarter 2018.

Outlook

For the second quarter of 2019, the company expects revenues of $4.45-$4.55 billion, similar to the first quarter. Further, adjusted EBITDA is projected to be $375-$395 million.

Tenneco revised its guidance for 2019. It expects revenues of $17.7-$18.1 billion compared with $18.2-$18.4 billion stated earlier. On a pro forma basis, it expects organic revenue growth rate to be 3%, with currency translation impact of negative 2%.

Source: Zacks

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David Kiley is Chief of Content for The BRAKE Report. Kiley is an award-winning business journalist and author, having covered the auto industry for USA Today, Businessweek, AOL/Huffington Post, as well as written articles for Automobile and Popular Mechanics.