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Tenneco (TEN) Tops Q2 Earnings Estimates, Lowers 2019 View

Zacks Equity Research

Tenneco Inc. TEN reported second-quarter 2019 results, wherein adjusted earnings per share of $1.20 beat the Zacks Consensus Estimate of 93 cents. In the prior-year quarter, the company’s bottom line was $1.84.

In the reported quarter, Tenneco’s adjusted net income was $97 million compared with $96 million in second-quarter 2018.

Its quarterly revenues rose 78% year over year to $4.5 billion. Also, the company’s revenues surpassed the Zacks Consensus Estimate by 1.1%. On a constant-currency basis, revenues rose 1% from the last year. Light-vehicle industry production declined 8% in the reported quarter.

Adjusted EBITDA (income before interest expenses, income taxes, non-controlling interests and depreciation, and amortization) was $414 million compared with $233 million recorded in the prior-year quarter.

Tenneco Inc. Price, Consensus and EPS Surprise

 

Tenneco Inc. Price, Consensus and EPS Surprise

Tenneco Inc. price-consensus-eps-surprise-chart | Tenneco Inc. Quote

Segmental Results

The Clean Air division’s second-quarter revenues were $1.83 billion compared with the year-earlier figure of $1.69 billion.

Revenues in the Ride Performance division were $709 million compared with $506 million recorded in the year-ago quarter.

The Powertrain division’s second-quarter revenues were $1.13 billion.

The Motorparts division’s revenues were $835 million, up from $333 million generated in second-quarter 2018.

Financial Position

Tenneco had cash and cash equivalents of $384 million as of Jun 30, 2019, down from $697 million as of Dec 31, 2018. Long-term debt was $5.51 billion as of Jun 30, 2019, compared with $5.34 billion as of Dec 31, 2018.

Outlook

For the third quarter of 2019, the company expects revenues to be $4.3-$4.4 billion. Further, adjusted EBITDA is projected to be $390-$410 million.

Tenneco revised its guidance for 2019. It expects revenues to be $17.6-$17.8 billion compared with $17.7-$18.1 billion stated earlier.

Zacks Rank & Stocks to Consider

Tenneco currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the auto space are Fox Factory Holding Corp FOXF, CarMax, Inc. KMX and Gentex Corporation GNTX, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Fox Factory has an expected long-term growth rate of 16.7%. In the past year, shares of the company have rallied 17%.

CarMax has an expected long-term growth rate of 12.6%. In the past year, shares of the company have moved up 13.6%.

Gentex has an expected long-term growth rate of 5%. In the past year, shares of the company have returned 13.9%.

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