Updated Research Report on Tenneco - Analyst Blog

By Zacks Equity Research,

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On Apr 11, 2014, we issued an updated research report on Tenneco Inc. ( TEN ). This Zacks Rank #3 (Hold) stock reported adjusted earnings per share of 96 cents in the fourth quarter of 2013, which beat the Zacks Consensus Estimate by 12 cents. Earnings per share jumped 45.5% year over year from 66 cents in the fourth quarter of 2012.

Revenues increased 15.9% year on year to $2.03 billion, beating the Zacks Consensus Estimate of $1.94 billion. Revenues benefited from higher global light vehicle volumes, launch of new light vehicle platforms and a growing commercial truck and off-highway business.

Tenneco's emission control business will benefit from tighter emission regulations through 2015, when its global market share is expected to hit 10%. The company expects to achieve a 5-year average compound annual original equipment (OE) revenue growth rate of 18% to 20% through 2014, driven by emissions regulations that are being implemented globally.

However, pricing pressure from original equipment manufacturers (OEMs) remains a problem for Tenneco. Additionally, the company largely depends on a few customers in the OEM segment. The company's top 10 aftermarket customers accounted for nearly 55% of total aftermarket sales in 2013.

Tenneco reported positive earnings surprises in the trailing four quarters with an average beat of 7.55%. The Zacks Consensus Estimate for Tenneco's 2014 earnings is $4.38 per share, up 15.93% over 2013.

Key Picks from the Sector

Some better-ranked stocks in the sector include Gentherm Incorporated ( THRM ), Valeo SA ( VLEEY ) and Allison Transmission Holdings, Inc. ( ALSN ), all of which carry a Zacks Rank #1 (Strong Buy).

ALLISON TRANSMN (ALSN): Free Stock Analysis Report

TENNECO INC (TEN): Free Stock Analysis Report

GENTHERM INC (THRM): Free Stock Analysis Report

VALEO SA-ADR (VLEEY): Get Free Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: ALSN , TEN , THRM , VLEEY

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