Tenneco Q3 Profit Drops, Revenues Rise; Adj. Results Beat View

(RTTNews) - Tenneco Inc. (TEN), a manufacturer of emission control and ride control systems, Monday said profit for the third quarter declined from the previous year amid restructuring expense and the absence of last year's tax benefit. Adjusted earnings as well as revenues topped estimates.

The company reported net income attributable to the company of $12 million or $0.19 per share, a sharp decline from last year's $125 million or $2.05 per share.

The latest results included restructuring and related expenses of $58 million pre-tax or $0.95 per share.

The prior-year results included a net tax benefit of $74 million or $1.22 per share, primarily related to the reversal of the tax valuation allowance on the company's U.S. net operating loss position and recording a tax valuation allowance in Spain for tax credits that may not be utilized due to tax losses there.

On an adjusted basis, net income was $62 million or $0.99 per share, while it totaled $52 million or $0.85 per share a year ago. On average, 11 analysts polled by Thomson Reuters expected earnings of $0.94 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenue climbed 10 percent to $1.963 billion from $1.778 billion, amid higher revenues in all segments. Wall Street expected revenues of $1.94 billion.

Clean Air revenue increased 12 percent to $1.328 billion, while Ride Performance revenue advanced 7 percent to $635 million.

Total value-add revenue, revenue excluding substrate sales, jumped 10 percent to $1.532 billion.

Global OE light vehicle revenue increased 10 percent to $1.394 billion, compared to an overall 5 percent increase in global industry light vehicle production in the quarter.

OE commercial and specialty vehicle revenue increased 28 percent to $236 million, while global aftermarket revenue was up 3 percent to $333 million.

Gregg Sherrill, CEO, said, "Our results demonstrate the strength and balance of our operations across end markets, regions, customers and product lines as we delivered record high third quarter revenue and adjusted EBIT, resulting in year-over-year margin improvement in both product lines."

Tenneco's outlook for its commercial vehicle business remains unchanged from last quarter with strong year-over-year revenue growth expected in the fourth quarter and for the full year, in spite of the overall weakness in commercial vehicle volumes.

The company expects its fourth quarter commercial and specialty revenue to be about even with the third quarter and full year commercial vehicle revenue to be toward the lower end of its revenue guidance for 2013.

TEN closed at $52.89 on Friday.