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Tenneco (TEN) Up 32.2% Since Q1 Earnings Beat, Raises '21 View
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Tenneco Inc.’s shares appreciated 32.2% after the company reported outstanding quarterly results on May 6. The Illinois-based auto supplier not just delivered a comprehensive beat but also posted higher year-over-year earnings and sales.
In the light of improving margins across all segments and better free cash flow performance on the back of the firm’s Accelerate+ program, Tenneco has raised its 2021 outlook. The company expects 2021 adjusted EBITDA in the band of $1.35-$1.45 billion, higher than the previous guidance of $1.3-$1.4 billion.
Full-year revenues are envisioned within $17.6-$18.1 billion, up from the prior outlook of $17.2-$17.8 billion. Management anticipates net debt to be less than $4.2 billion at the end of 2021, down from the $4.5 billion recorded as of Dec 31, 2020.
Q1 Earnings Highlights
Tenneco reported adjusted earnings of $1.09 per share for first-quarter 2021, surpassing the Zacks Consensus Estimate of 71 cents. Higher-than-expected contribution from Clean Air, Performance Solutions and Motorparts segments led to this outperformance. The reported figure also compares favorably with the year-ago loss of 31 cents.
Revenues of $4,731 million topped the Zacks Consensus Estimate of $4,394 million and increased 23% year over year. Adjusted EBITDA for the March-end quarter came in at $388 million, jumping 62% from the year-ago period.
Segmental Performance
For the January-March period, the Clean Air division’s revenues summed $1,036 million, higher than the year-ago figure of $845 million. The metric, however, missed the Zacks Consensus Estimate of $1,933 million. Adjusted EBITDA totaled $157 million for the quarter, up from the year-ago quarter’s $104 million. The reported EBITDA also topped the consensus metric of $142 million.
For the first quarter, revenues in the newly-named Performance Solutions division (formerly called Ride Performance segment) came in at $787 million, increasing from the $588 million recorded in the year-earlier period and surpassing the consensus mark of $636 million.
Adjusted EBITDA totaled $47 million in the March-end quarter, rising from the $38 million witnessed in the prior-year quarter. The reported EBITDA also beat the consensus metric of $24.71 million.
The Powertrain division’s revenues amounted to $1,101 million for the first quarter, rising from the $916 million registered in the year-earlier period and marginally outpacing the consensus mark of $1,088 million. Adjusted EBITDA came in at $126 million for the reported quarter, up from the year-ago quarter’s $68 million. The reported EBITDA was at par with the consensus metric.
The Motorparts division’s revenues came in at $719 million, up from the $706 million generated in first-quarter 2020. The revenue figure, however, missed the Zacks Consensus Estimate of $727 million. Adjusted EBITDA totaled $105 million for the quarter, up from the $73 million generated in the corresponding period of 2020. The reported EBITDA also beat the consensus metric of $86 million.
Financial Position & Q2 Outlook
Tenneco — which shares space with Magna International (MGA - Free Report) , Meritor and American Axle & Manufacturing (AXL - Free Report) — had cash and cash equivalents of $626 million as of Mar 31, 2021 compared with $767 million in the corresponding period of 2020. Long-term debt totaled $5,111 million, down from $5,837 million as of Mar 31, 2020. During the first quarter, the company’s net cash used by operating activities was $50 million compared with the year-earlier quarter’s outflow $152 million.
During the reported quarter, Tenneco completed refinancing to extend debt maturities of $800 million from 2024 to 2029, boosting the company's maturity profile and enhancing its financial flexibility.
For the second quarter of 2021, Tenneco — which currently carries a Zacks Rank #3 (Hold) — projects revenues between $4.35 billion and $4.55 billion. Adjusted EBITDA is forecast in the band of $325-$355 million.
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Tenneco (TEN) Up 32.2% Since Q1 Earnings Beat, Raises '21 View
Tenneco Inc.’s shares appreciated 32.2% after the company reported outstanding quarterly results on May 6. The Illinois-based auto supplier not just delivered a comprehensive beat but also posted higher year-over-year earnings and sales.
In the light of improving margins across all segments and better free cash flow performance on the back of the firm’s Accelerate+ program, Tenneco has raised its 2021 outlook. The company expects 2021 adjusted EBITDA in the band of $1.35-$1.45 billion, higher than the previous guidance of $1.3-$1.4 billion.
Full-year revenues are envisioned within $17.6-$18.1 billion, up from the prior outlook of $17.2-$17.8 billion. Management anticipates net debt to be less than $4.2 billion at the end of 2021, down from the $4.5 billion recorded as of Dec 31, 2020.
Q1 Earnings Highlights
Tenneco reported adjusted earnings of $1.09 per share for first-quarter 2021, surpassing the Zacks Consensus Estimate of 71 cents. Higher-than-expected contribution from Clean Air, Performance Solutions and Motorparts segments led to this outperformance. The reported figure also compares favorably with the year-ago loss of 31 cents.
Revenues of $4,731 million topped the Zacks Consensus Estimate of $4,394 million and increased 23% year over year. Adjusted EBITDA for the March-end quarter came in at $388 million, jumping 62% from the year-ago period.
Segmental Performance
For the January-March period, the Clean Air division’s revenues summed $1,036 million, higher than the year-ago figure of $845 million. The metric, however, missed the Zacks Consensus Estimate of $1,933 million. Adjusted EBITDA totaled $157 million for the quarter, up from the year-ago quarter’s $104 million. The reported EBITDA also topped the consensus metric of $142 million.
For the first quarter, revenues in the newly-named Performance Solutions division (formerly called Ride Performance segment) came in at $787 million, increasing from the $588 million recorded in the year-earlier period and surpassing the consensus mark of $636 million.
Adjusted EBITDA totaled $47 million in the March-end quarter, rising from the $38 million witnessed in the prior-year quarter. The reported EBITDA also beat the consensus metric of $24.71 million.
The Powertrain division’s revenues amounted to $1,101 million for the first quarter, rising from the $916 million registered in the year-earlier period and marginally outpacing the consensus mark of $1,088 million. Adjusted EBITDA came in at $126 million for the reported quarter, up from the year-ago quarter’s $68 million. The reported EBITDA was at par with the consensus metric.
The Motorparts division’s revenues came in at $719 million, up from the $706 million generated in first-quarter 2020. The revenue figure, however, missed the Zacks Consensus Estimate of $727 million. Adjusted EBITDA totaled $105 million for the quarter, up from the $73 million generated in the corresponding period of 2020. The reported EBITDA also beat the consensus metric of $86 million.
Financial Position & Q2 Outlook
Tenneco — which shares space with Magna International (MGA - Free Report) , Meritor and American Axle & Manufacturing (AXL - Free Report) — had cash and cash equivalents of $626 million as of Mar 31, 2021 compared with $767 million in the corresponding period of 2020. Long-term debt totaled $5,111 million, down from $5,837 million as of Mar 31, 2020. During the first quarter, the company’s net cash used by operating activities was $50 million compared with the year-earlier quarter’s outflow $152 million.
During the reported quarter, Tenneco completed refinancing to extend debt maturities of $800 million from 2024 to 2029, boosting the company's maturity profile and enhancing its financial flexibility.
For the second quarter of 2021, Tenneco — which currently carries a Zacks Rank #3 (Hold) — projects revenues between $4.35 billion and $4.55 billion. Adjusted EBITDA is forecast in the band of $325-$355 million.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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