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Tenneco Inc. reported adjusted earnings of 33 cents per diluted share in third-quarter 2020, lagging the Zacks Consensus Estimate of 43 cents. Dismal revenues from the Ride Performance segment resulted in this lower-than-expected profit.
Moreover, the bottom-line figure compares unfavorably with the year-ago quarter’s earnings of $1.23 per share.
The Illinois-based auto supplier recorded revenues of $4,256 million in the reported quarter, beating the Zacks Consensus Estimate of $3,961 million. The top-line figure, however, declined from the $4,319 million recorded in third-quarter 2019. Adjusted EBITDA for the September-end quarter came in at $388 million, up $1 million from the year-ago level, primarily driven by operating performance, and enhanced contribution from structural and temporary cost savings.
For the July-September period, the Clean Air division’s revenues summed $1,919 million compared with the year-ago figure of $1,772 million. The revenue figure, however, surpassed the Zacks Consensus Estimate of $1,739 million. Adjusted EBITDA totaled $149 million in the quarter, down from the year-ago quarter’s $157 million.
For the third quarter, revenues in the Ride Performance division came in at $600 million, down from the $671 million recorded in the year-earlier period. The reported figure also missed the Zacks Consensus Estimate of $613 million. Adjusted EBITDA totaled $32 million in the September-end quarter, declining from the $42 million witnessed in the prior-year quarter.
The Powertrain division’s revenues amounted to $1,007 million during the third quarter of 2020, decreasing from the $1,082 million recorded in the corresponding quarter of 2019. The revenue figure, however, outpaced the Zacks Consensus Estimate of $973 million. Adjusted EBITDA came in at $124 million in the reported quarter, up from the year-ago quarter’s $109 million.
The Motorparts division’s revenues came in at $730 million, plunging from the $794 million generated in third-quarter 2019. Nevertheless, the revenue figure topped the Zacks Consensus Estimate of $702 million. Adjusted EBITDA totaled $131 million in the July-September quarter, up from the prior-year quarter’s adjusted EBITDA of $121 million.
Financial Position
Tenneco had cash and cash equivalents of $716 million as of Sep 30, 2020, compared with the $564 million seen as of Dec 31, 2019. Long-term debt totaled $5,596 million, up from $5,371 million as of Dec 31, 2019. However, total debt was recorded at $5,772 million, down $1,079 million from the second quarter owing to the pay down of the revolving credit facility.
During the third quarter, the company’s net cash provided by operating activities was $486 million compared with the year-earlier quarter’s $164 million.
Outlook
For the fourth quarter, Tenneco expects revenues to be roughly at par with the third quarter and adjusted EBITDA margin to expand almost 200 basis points year on year.
The company projects full-year capital expenditures of approximately $380 million, and net debt to be at par or below the 2019 year-end level of $5 billion.
Zacks Rank & Key Picks
Tenneco currently carries a Zacks Rank of 3 (Hold). Shares of the company have depreciated 40.1%, year to date, while the industry has witnessed a fall of 0.2%.
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Tenneco's (TEN) Q3 Earnings Lag, Sales Surpass Estimates
Tenneco Inc. reported adjusted earnings of 33 cents per diluted share in third-quarter 2020, lagging the Zacks Consensus Estimate of 43 cents. Dismal revenues from the Ride Performance segment resulted in this lower-than-expected profit.
Moreover, the bottom-line figure compares unfavorably with the year-ago quarter’s earnings of $1.23 per share.
The Illinois-based auto supplier recorded revenues of $4,256 million in the reported quarter, beating the Zacks Consensus Estimate of $3,961 million. The top-line figure, however, declined from the $4,319 million recorded in third-quarter 2019. Adjusted EBITDA for the September-end quarter came in at $388 million, up $1 million from the year-ago level, primarily driven by operating performance, and enhanced contribution from structural and temporary cost savings.
Tenneco Inc. Price, Consensus and EPS Surprise
Tenneco Inc. price-consensus-eps-surprise-chart | Tenneco Inc. Quote
Segmental Highlights
For the July-September period, the Clean Air division’s revenues summed $1,919 million compared with the year-ago figure of $1,772 million. The revenue figure, however, surpassed the Zacks Consensus Estimate of $1,739 million. Adjusted EBITDA totaled $149 million in the quarter, down from the year-ago quarter’s $157 million.
For the third quarter, revenues in the Ride Performance division came in at $600 million, down from the $671 million recorded in the year-earlier period. The reported figure also missed the Zacks Consensus Estimate of $613 million. Adjusted EBITDA totaled $32 million in the September-end quarter, declining from the $42 million witnessed in the prior-year quarter.
The Powertrain division’s revenues amounted to $1,007 million during the third quarter of 2020, decreasing from the $1,082 million recorded in the corresponding quarter of 2019. The revenue figure, however, outpaced the Zacks Consensus Estimate of $973 million. Adjusted EBITDA came in at $124 million in the reported quarter, up from the year-ago quarter’s $109 million.
The Motorparts division’s revenues came in at $730 million, plunging from the $794 million generated in third-quarter 2019. Nevertheless, the revenue figure topped the Zacks Consensus Estimate of $702 million. Adjusted EBITDA totaled $131 million in the July-September quarter, up from the prior-year quarter’s adjusted EBITDA of $121 million.
Financial Position
Tenneco had cash and cash equivalents of $716 million as of Sep 30, 2020, compared with the $564 million seen as of Dec 31, 2019. Long-term debt totaled $5,596 million, up from $5,371 million as of Dec 31, 2019. However, total debt was recorded at $5,772 million, down $1,079 million from the second quarter owing to the pay down of the revolving credit facility.
During the third quarter, the company’s net cash provided by operating activities was $486 million compared with the year-earlier quarter’s $164 million.
Outlook
For the fourth quarter, Tenneco expects revenues to be roughly at par with the third quarter and adjusted EBITDA margin to expand almost 200 basis points year on year.
The company projects full-year capital expenditures of approximately $380 million, and net debt to be at par or below the 2019 year-end level of $5 billion.
Zacks Rank & Key Picks
Tenneco currently carries a Zacks Rank of 3 (Hold). Shares of the company have depreciated 40.1%, year to date, while the industry has witnessed a fall of 0.2%.
Some better-ranked stocks in the auto sector include Lear Corporation (LEA - Free Report) , Autoliv Inc (ALV - Free Report) and LCI Industries (LCII - Free Report) , all of which sport a Zacks Rank of 1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>