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Tenneco (TEN) Down 5.5% Since Last Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for Tenneco (TEN - Free Report) . Shares have lost about 5.5% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Tenneco due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Tenneco Lags on Q4 Earnings, Revenues Slip Down Y/Y

Tenneco incurred an adjusted loss of 11 cents per share in the 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 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 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) will be acquiring it as per a recent company announcement.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision.

VGM Scores

Currently, Tenneco has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Tenneco has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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