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Tenneco (TEN) Lags on Q4 Earnings, Announces Its Buyout by Apollo
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Tenneco incurred an adjusted loss of 11 cents per share in fourth-quarter 2021 against the Zacks Consensus Estimate of earnings of 16 cents. The downslide stemmed from lower-than-expected EBITDA from the Performance Solutions and Motorparts segments. The bottom line slipped 107% from the year-ago earnings of $1.68 a share. Revenues of $4,389 million topped the Zacks Consensus Estimate of $4,186.2 million but declined around 5.6% year over year.
Segmental Performance
In the reported quarter, the Clean Air division’s revenues summed $2,051 million, lower than the year-ago figure of $2,117 million. The figure, however, surpassed the Zacks Consensus Estimate of $1,917 million. Adjusted EBITDA totaled $128 million in the quarter, down from $160 million reported in the prior-year quarter. The metric, however, topped the consensus estimate of $119 million.
Revenues in the Performance Solutions division amounted to $720 million, decreasing from $776 million recorded in the year-earlier period but surpassing the consensus mark of $656 million. Adjusted EBITDA totaled $15 million in the December-end quarter, down from $57 million in the prior-year quarter. The reported EBITDA also missed the consensus mark of $24.55 million.
The Powertrain division’s revenues amounted to $909 million in the fourth quarter, falling from $1,027 million in the year-earlier period but outpacing the consensus mark of $892 million. Adjusted EBITDA totaled $70 million, beating the consensus mark of $65 million but declining from $124 million in the year-ago period.
The Motorparts division’s revenues were $709 million, down from the $730 million generated in fourth-quarter 2020 and lagged the Zacks Consensus Estimate of $730 million. Adjusted EBITDA totaled $96 million in the quarter, down from $110 million in the prior-year quarter and marginally missing the consensus mark of $98 million.
Financials & Outlook
Tenneco had cash and cash equivalents of $859 million as of Dec 31, 2021, down from $798 million as of Dec 31, 2020. Long-term debt totaled $5,018 million, down from $5,171 million as of Dec 31, 2020. During the fourth quarter, the company’s net cash provided by operating activities was $258 million compared with the year-earlier quarter’s $474 million.
Tenneco has withheld from providing a guidance for 2022 since Apollo Global Management (APO - Free Report) will be acquiring it as per a recent company announcement.
Takeover by Apollo
In an announcement on Feb 23, 2020, Tenneco stated that it is soon to be acquired by Apollo Funds, affiliates of Apollo Global, in an all-cash transaction with an estimated valuation of around $7.1 billion, including debts.
The purchase price has been pegged at $20 per share, representing a 100.4% premium over the company's closing share price of $9.98 on Feb 22, 2022 and a 71.6% premium over the company's unaffected 90-day volume-weighted average price or VWAP. Upon completion of the transaction, Tenneco's shares will cease public trading on the New York Stock Exchange, and it will function as a private company. However, it will retain the Tenneco name and brand.
The transaction is expected to close in the second half of 2022, subject to customary closing conditions, including approval by Tenneco shareholders and receipt of regulatory approvals. However, it is not subject to a financing condition.
The partnership will better serve Original Equipment Market or OEM, and aftermarket blue-chip customers globally, besides maximizing value for shareholders.
Harley-Davidson has an expected earnings growth rate of 1.9% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 21.7% upward in the past 60 days.
Harley-Davison’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters. HOG pulled off a trailing four-quarter earnings surprise of 77.59%, on average. The stock has rallied 8.4% over a year.
Tesla has an expected earnings growth rate of 40.7% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 22.3% upward in the past 60 days.
Tesla’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. TSLA pulled off a trailing four-quarter earnings surprise of 33.3%, on average. The stock has also rallied 3% over a year.
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Tenneco (TEN) Lags on Q4 Earnings, Announces Its Buyout by Apollo
Tenneco incurred an adjusted loss of 11 cents per share in fourth-quarter 2021 against the Zacks Consensus Estimate of earnings of 16 cents. The downslide stemmed from lower-than-expected EBITDA from the Performance Solutions and Motorparts segments. The bottom line slipped 107% from the year-ago earnings of $1.68 a share. Revenues of $4,389 million topped the Zacks Consensus Estimate of $4,186.2 million but declined around 5.6% year over year.
Segmental Performance
In the reported quarter, the Clean Air division’s revenues summed $2,051 million, lower than the year-ago figure of $2,117 million. The figure, however, surpassed the Zacks Consensus Estimate of $1,917 million. Adjusted EBITDA totaled $128 million in the quarter, down from $160 million reported in the prior-year quarter. The metric, however, topped the consensus estimate of $119 million.
Revenues in the Performance Solutions division amounted to $720 million, decreasing from $776 million recorded in the year-earlier period but surpassing the consensus mark of $656 million. Adjusted EBITDA totaled $15 million in the December-end quarter, down from $57 million in the prior-year quarter. The reported EBITDA also missed the consensus mark of $24.55 million.
The Powertrain division’s revenues amounted to $909 million in the fourth quarter, falling from $1,027 million in the year-earlier period but outpacing the consensus mark of $892 million. Adjusted EBITDA totaled $70 million, beating the consensus mark of $65 million but declining from $124 million in the year-ago period.
The Motorparts division’s revenues were $709 million, down from the $730 million generated in fourth-quarter 2020 and lagged the Zacks Consensus Estimate of $730 million. Adjusted EBITDA totaled $96 million in the quarter, down from $110 million in the prior-year quarter and marginally missing the consensus mark of $98 million.
Financials & Outlook
Tenneco had cash and cash equivalents of $859 million as of Dec 31, 2021, down from $798 million as of Dec 31, 2020. Long-term debt totaled $5,018 million, down from $5,171 million as of Dec 31, 2020. During the fourth quarter, the company’s net cash provided by operating activities was $258 million compared with the year-earlier quarter’s $474 million.
Tenneco has withheld from providing a guidance for 2022 since Apollo Global Management (APO - Free Report) will be acquiring it as per a recent company announcement.
Takeover by Apollo
In an announcement on Feb 23, 2020, Tenneco stated that it is soon to be acquired by Apollo Funds, affiliates of Apollo Global, in an all-cash transaction with an estimated valuation of around $7.1 billion, including debts.
The purchase price has been pegged at $20 per share, representing a 100.4% premium over the company's closing share price of $9.98 on Feb 22, 2022 and a 71.6% premium over the company's unaffected 90-day volume-weighted average price or VWAP. Upon completion of the transaction, Tenneco's shares will cease public trading on the New York Stock Exchange, and it will function as a private company. However, it will retain the Tenneco name and brand.
The transaction is expected to close in the second half of 2022, subject to customary closing conditions, including approval by Tenneco shareholders and receipt of regulatory approvals. However, it is not subject to a financing condition.
The partnership will better serve Original Equipment Market or OEM, and aftermarket blue-chip customers globally, besides maximizing value for shareholders.
Zacks Rank & Key Picks
Currently, Tenneco has a Zacks Rank #3 (Hold).
Better-ranked players in the auto space include Harley-Davidson (HOG - Free Report) , sporting a Zacks Rank #1 (Strong Buy) and Tesla (TSLA - Free Report) , with a Zacks Rank #2 (Buy), currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
Harley-Davidson has an expected earnings growth rate of 1.9% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 21.7% upward in the past 60 days.
Harley-Davison’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters. HOG pulled off a trailing four-quarter earnings surprise of 77.59%, on average. The stock has rallied 8.4% over a year.
Tesla has an expected earnings growth rate of 40.7% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 22.3% upward in the past 60 days.
Tesla’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. TSLA pulled off a trailing four-quarter earnings surprise of 33.3%, on average. The stock has also rallied 3% over a year.