Tenneco Q4 Net Profit Falls, But Adj. EPS Tops Consensus; To Buy Back Shares

(RTTNews) - Auto parts company Tenneco Inc. (TEN) reported significantly lower fourth-quarter 2014 net income attributable to the company of $21 million, or $0.33 per share, which includes $46 million in restructuring, pension and refinancing related expenses. This compares with $54 million, or $0.88 per share of net income in the fourth quarter 2013.

However, on an adjusted basis, quarterly net income totaled $65 million, or $1.05 per share, versus $59 million, or $0.96 per share, a year before. Analysts polled by Thomson Reuters expected the company to report earnings of $0.99 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenue in the fourth quarter was $2.0 billion, down slightly year-over-year primarily due to the impact of $84 million in negative currency, as well as lower commercial truck and off-highway revenue. Excluding currency, total revenue in the fourth quarter rose 3% to $2.09 billion. Wall Street expected revenues of $2.03 billion for the period.

For the first quarter of 2015, modest industry light vehicle production growth is projected, with IHS forecasting 1% growth in the regions where Tenneco operates. Excluding currency, Tenneco sees total combined OE and aftermarket revenue growth of about 4%, chiefly driven by higher light vehicle unit volumes, additional content on commercial truck and off-highway programs to meet environmental regulations, and year-over-year growth in the aftermarket. Based on current exchange rates, the firm anticipates a currency headwind in the first quarter of about 4%.

In 2015, IHS is forecasting 3% higher industry light vehicle production worldwide. Tenneco sees OE light vehicle revenue in 2015 to continue outpacing global industry production, driven by the company's strong platform position with leading OEMs worldwide, the launch and ramp up of new programs and increased technology content.

For the full year 2015, Tenneco expects year-on-year total combined OE and aftermarket revenue growth in the range of 5% to 8%, excluding the impact of currency.

Separately, the company said its board has authorized the repurchase of up to $350 million of the company's outstanding common stock over the next three years as part of the company's overall capital allocation strategy.