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Tenneco's (TEN) Q2 Earnings Lag Estimates, Revenues In Line
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Tenneco Inc. (TEN - Free Report) reported second-quarter 2018 results wherein adjusted earnings per share of $1.92 missed the Zacks Consensus Estimate of $2. However, the company’s bottom line improved from the prior-year quarter’s figure of $1.88.
Tenneco’s adjusted net income in the reported quarter was $99 million compared with $101 million in second-quarter 2017.
Quarterly revenues rose 9% year over year to $2.54 billion, almost in line with the Zacks Consensus Estimate. The year-over-year rise was driven by revenue growth across Clean Air, Ride Performance and Aftermarket divisions. On a constant-currency basis, total revenues rose 8% while value-added revenues increased 6% to $1.89 billion.
Adjusted EBIT (earnings before interest, taxes and non-controlling interests) was $175 million compared with $178 million recorded prior-year quarter. The adjusted EBIT results were impacted by rise in volume across commercial trucks, light vehicles and off-highway products, offset by costs related to steel and the launch of a major truck platform.
Segmental Results
Revenues from the Clean Air division increased 5% to $1.69 billion during the quarter under review. Adjusted EBIT rose to $122 million from $118 million in the prior-year quarter.
Revenues from the Ride Performance division rose 13% to $506 million. Adjusted EBIT declined to $23 million compared with $27 million recorded in the year-ago quarter.
Revenues from the Aftermarket division gained 1% to $337 million. However, adjusted EBIT decreased to $53 million compared with $55 million recorded in the year-ago quarter.
Financial Position
Tenneco had cash and cash equivalents of $235 million as of Jun 30, 2018, down from $315 million as of Dec 31, 2017. Long-term debt was $1.38 billion as of Jun 30, 2018, compared with $1.36 billion as of Dec 31, 2017.
Outlook
For third-quarter 2018, the company expects total revenues to grow 5% on a constant-currency basis. Considering the currency impacts, the estimated revenues are pegged at negative 2%, based on currency exchange rates as of Jun 30, 2018. Further, the company projects organic growth to outperform the industry’s growth. It will be driven by commercial-truck, light-vehicle and off-highway revenues along with a steady contribution from the global aftermarket segment.
For 2018, Tenneco reaffirmed its anticipated 5% organic revenue growth, outpacing the industry production by 3 percentage points. Moreover, based on currency exchange rates as of Jun 30, 2018, the company expects the currency to have 1% positive impact on revenues.
Fox Factory has an expected long-term growth rate of 15.8%. Over a year, shares of the company have gained 27.9%.
Volvo has an expected long-term growth rate of 15%. Over a year, shares of the company have gained 2.4%.
Oshkosh has an expected long-term growth rate of 18.3%. Shares of the company have risen 9.3% in the past year.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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Tenneco's (TEN) Q2 Earnings Lag Estimates, Revenues In Line
Tenneco Inc. (TEN - Free Report) reported second-quarter 2018 results wherein adjusted earnings per share of $1.92 missed the Zacks Consensus Estimate of $2. However, the company’s bottom line improved from the prior-year quarter’s figure of $1.88.
Tenneco’s adjusted net income in the reported quarter was $99 million compared with $101 million in second-quarter 2017.
Quarterly revenues rose 9% year over year to $2.54 billion, almost in line with the Zacks Consensus Estimate. The year-over-year rise was driven by revenue growth across Clean Air, Ride Performance and Aftermarket divisions. On a constant-currency basis, total revenues rose 8% while value-added revenues increased 6% to $1.89 billion.
Tenneco Inc. Price, Consensus and EPS Surprise
Tenneco Inc. Price, Consensus and EPS Surprise | Tenneco Inc. Quote
Adjusted EBIT (earnings before interest, taxes and non-controlling interests) was $175 million compared with $178 million recorded prior-year quarter. The adjusted EBIT results were impacted by rise in volume across commercial trucks, light vehicles and off-highway products, offset by costs related to steel and the launch of a major truck platform.
Segmental Results
Revenues from the Clean Air division increased 5% to $1.69 billion during the quarter under review. Adjusted EBIT rose to $122 million from $118 million in the prior-year quarter.
Revenues from the Ride Performance division rose 13% to $506 million. Adjusted EBIT declined to $23 million compared with $27 million recorded in the year-ago quarter.
Revenues from the Aftermarket division gained 1% to $337 million. However, adjusted EBIT decreased to $53 million compared with $55 million recorded in the year-ago quarter.
Financial Position
Tenneco had cash and cash equivalents of $235 million as of Jun 30, 2018, down from $315 million as of Dec 31, 2017. Long-term debt was $1.38 billion as of Jun 30, 2018, compared with $1.36 billion as of Dec 31, 2017.
Outlook
For third-quarter 2018, the company expects total revenues to grow 5% on a constant-currency basis. Considering the currency impacts, the estimated revenues are pegged at negative 2%, based on currency exchange rates as of Jun 30, 2018. Further, the company projects organic growth to outperform the industry’s growth. It will be driven by commercial-truck, light-vehicle and off-highway revenues along with a steady contribution from the global aftermarket segment.
For 2018, Tenneco reaffirmed its anticipated 5% organic revenue growth, outpacing the industry production by 3 percentage points. Moreover, based on currency exchange rates as of Jun 30, 2018, the company expects the currency to have 1% positive impact on revenues.
Zacks Rank & Key Picks
Tenneco currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the auto space are Fox Factory Holding Corporation (FOXF - Free Report) , AB Volvo (VLVLY - Free Report) and Oshkosh Corporation (OSK - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Fox Factory has an expected long-term growth rate of 15.8%. Over a year, shares of the company have gained 27.9%.
Volvo has an expected long-term growth rate of 15%. Over a year, shares of the company have gained 2.4%.
Oshkosh has an expected long-term growth rate of 18.3%. Shares of the company have risen 9.3% in the past year.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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