) reported an adjusted profit of $40.0 million or 66 cents per
share in the fourth quarter 2012, up 25% from $32.0 million or 53
cents in the corresponding quarter a year ago. However, earnings
missed the Zacks Consensus Estimate by 2 cents. On a reported
basis, the company's profit was $33.0 million or 54 cents per
share compared with $30.0 million or 49 cents in the fourth
quarter of 2011.
Revenues decreased 1.7% to $1.75 billion, which was lower than
the Zacks Consensus Estimate of $1.78 billion. Excluding
substrate sales and currency impact, revenues increased 1.9% to
$1.39 billion. The year-over-year increase in revenues was
attributable to a rise in sales volume of light vehicles in North
America and China and higher North American aftermarket sales.
Adjusted EBIT (earnings before interest, taxes and
non-controlling interests) improved 5.6% to $94.0 million from
$89.0 million in the year-ago quarter. The improvement was driven
by higher light vehicle sale and effective operational cost
remained flat at $846.0 million on a year-over-year basis. The
North America original equipment business reporting flat revenues
of $682.0 million in the quarter compared with the year-ago
level. Meanwhile, Aftermarket revenues grew marginally by 1% to
Adjusted EBIT augmented 17% to $55.0 million from $47.0 million a
year ago. The rise in EBIT was driven by higher volumes from OE
(original equipment) businesses, improved aftermarket sales and
effective operational cost control measures.
went down 9% to $666.0 million. Revenues from European OE
declined 9% to $453.0 million, due to a 17% fall in revenues from
the Ride Control business and a 6% dip in revenues from the
Emission Control business. European aftermarket revenues fell 9%
to $72.0 million, mainly due to a 19% decrease in revenues from
Emission Control business.
slid 7% to $141.0 million. Adjusted EBIT from Europe, South
America and India decreased 35.7% to $18.0 million from $28.0
million a year ago.
(Asia and Australia) increased 15% to $241.0 million, driven by a
19% increase in revenues from Asia. Adjusted EBIT from Asia
Pacific jumped 50% to $21.0 million from $14.0 million a year
ago. The growth in EBIT was due to higher sales volume in China
and Thailand and improved manufacturing efficiency in the new
Tenneco had cash and cash equivalents of $223.0 million as of Dec
31, 2012, up from $214.0 million as of Dec 31, 2011. Net debt was
$1.18 billion as of Dec 31, 2012 compared with $1.22 billion as
of Dec 31, 2011.
For the full year 2012, the company had cash flow from operating
activities of $244.0 million, up from $201.0 million in the
year-ago period. Capital expenditures for the year were $263.0
million compared with $218 million in 2011.
Tenneco reported 2012 adjusted earnings per share of $3.32, up
24.8% from $2.66 a year ago. Reported earnings increased to
$275.0 million or $4.50 per share from $157.0 million or $2.55 in
2011. Revenues increased 2.2% to $7.4 billion from $7.2 billion
Based on IHS forecasts, the company expects that light vehicle
production will decrease by 2% in the first quarter of 2013, with
a 2% decrease in North America, 10% fall in Europe, and 12%
decline in India. However, China and South America are expected
to report volume increase of 8% and 5%, respectively.
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.
We appreciate the company's performance in commercial vehicle
business and expect that it will benefit from the tighter
emission regulation through 2015. However, the company faces risk
from the relatively weak demand for high-margin aftermarket
parts. The company retains a Zacks Rank #3 (Hold).
Commercial Vehicle Group Inc.
) with Zacks Rank #1 (Strong Buy) are performing well in the same
industry where Tenneco operates.
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