) has announced the launch of its ride control business for
Ford Motor Co.
) new 2013 Escape. The company will be providing front struts and
rear monotube shocks for the Ford Escape, which will be
manufactured in the recently redesigned Louisville Assembly
Rear monotube shocks will be manufactured in the Owen Sound,
Ontario, facility while front struts will be produced in the
Celaya, Mexico, plant. Shocks and struts maintain the vertical load
of the vehicle on the vehicle tires, thus helping the tire keep in
contact with the road.
Tenneco is the global supplier of emission control and ride
control systems of Ford Motor. These products are used in a number
of Ford Motor's passenger cars, light and medium duty trucks.
Tenneco witnessed a 5% year-over-year growth in profit in the
first quarter of 2012 that recorded $41 million or 66 cents
per share, missing the Zacks Consensus Estimate by 7 cents.
Revenues surged 9% year-over-year to $1.9 billion in the quarter.
The hike was attributable to the company's strong customer base,
higher OE light vehicle production volumes, incremental commercial
vehicle revenues and increased revenues from North American
Lake Forest, Illinois-based Tenneco is a leading manufacturer
and supplier of emission control, ride control systems, and systems
for the automotive original equipment manufacturers (OEMs) and the
aftermarket. It provides the ride control products to 22 light
vehicle manufacturers which are used in 150 light vehicle models.
The major customers include
Navistar International Corporation
Currently, Tenneco retains a Zacks #3 Rank, which translates
into a short-term (1 to 3 months) "Hold" rating. The company
continues to benefit from tighter emission regulations along with
consistent performance in the commercial business segment. However,
we are concerned about the prevailing customer concentration risks
faced by the company. We have a long-term (more than 6 months)
"Neutral" recommendation on the stock.
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