) reported a 9.1% increase in adjusted earnings per share to 72
cents in the first quarter of 2013 from 66 cents a year ago,
surpassing the Zacks Consensus Estimate by 7 cents. Net income
augmented 7.3% to $44.0 million from $41.0 million a year ago. On
a reported basis, the company's profit was $54.0 million or 88
cents per share compared with $30.0 million or 49 cents in the
first quarter of 2012.
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Revenues increased marginally to $1.90 billion, beating the Zacks
Consensus Estimate of $1.84 billion. The year-over-year increase
in revenues was attributable to higher revenues from Clean Air
division, partially offset by decline in revenues from Ride
Adjusted EBIT (earnings before interest, taxes and
non-controlling interests) remained flat year over year at $97.0
million. Adjusted EBIT benefited from higher Clean Air EBIT
offset by declining Ride Performance EBIT.
Clean Air Division
improved marginally to $1.29 billion from $1.28 billion a year
ago. The improvement was due to higher revenues from Asia
Pacific, mainly driven by increase in light vehicle production in
China. Adjusted EBIT augmented to $78.0 million from $76.0
million due to higher Asia Pacific volumes and effective
operational cost management.
Ride Performance Division
fell 3.2% to $607.0 million due to lower light and commercial
vehicle revenues in Europe and lower commercial vehicle revenues
in North America. Adjusted EBIT declined to $40.0 million from
$44.0 million due to lower volumes in Europe and North America
and related manufacturing absorption costs.
Tenneco had cash and cash equivalents of $242.0 million as of Mar
31, 2013, up from $223.0 million as of Dec 31, 2012. Net debt was
$1.38 billion as of Mar 31, 2013 compared with $1.18 billion as
of Dec 31, 2012.
For the first three months of 2013, the company had cash outflow
from operating activities of $123.0 million, up from $85.0
million in the year-ago period. Capital expenditures for the
period were $70.0 million compared with $65.0 million in the
corresponding period year ago.
Based on IHS forecasts, the company expects that total light
vehicle production will increase 3% in the second quarter of
2013, with a 4% rise in North America, 8% hike in China, 9%
increase in South America and 3% boost in India. However, it will
decline 3% in Europe due to the economic uncertainty.
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.
Currently, the company retains a Zacks Rank #3 (Hold).
Some other stocks that are performing well in the industry where
Tenneco operates include
). All these companies carry a Zacks Rank #1 (Strong Buy).