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Tenneco’s Revenue and Income Fell in 3Q15

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Oct. 27 2015, Updated 8:08 a.m. ET

Tenneco’s price movement

Tenneco (TEN) has a market cap of $3.3 billion. Tenneco’s YTD (year-to-date) price movement was going down until the recent earnings report. After that, TEN rose 13.1% to close at $54.72 per share as of October 23, 2015. Price movements on weekly, monthly, and YTD bases are 14.6%, 29.6%, and -3.3%, respectively.

Technically, Tenneco has broken all major support throughout 2015. Currently, its 20-day, 50-day, and 200-day moving averages are 15.7%, 16.3%, and 1.63% above the moving averages.

The iShares MSCI Italy Capped ETF (EWI) invests 3.1% of its holdings in Tenneco. The ETF tracks a market-cap-weighted index of Italian companies. It covers the top 85% of Italian companies by market cap. The YTD price movement of EWI is 13.7% as of October 22, 2015.

Below are the market caps of Tenneco’s (TEN) competitors:

  • Cummins (CMI) — $20.2 billion
  • BorgWarner (BWA) — $9.9 billion
  • Lear (LEA) — $9.3 billion
  • Meritor (MTOR) — $1.1 billion
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Tenneco’s 3Q15 performance

Tenneco reported net revenue of $2,025 million in 3Q15, a decrease of 4.9% compared to $2,130 million in 2Q15. The value add revenue from the clear air division and the ride performance division decreased 3.4% and 7.8%, respectively, in 3Q15.

Net income and EPS (earnings per share) fell $66 million and $0.88, respectively, in 3Q15, a decrease of 57.1% and 57.3%, respectively, on a quarterly basis. The cash and cash equivalents decreased to $220 million, and inventories increased to $720 million in 3Q15, compared to $250 million and $713 million, respectively, in 2Q15. The long-term debt-to-equity ratio increased to 2.8% in 3Q15, an increase of 39.0% on a quarterly basis.

Below are some of Tenneco’s key 3Q15 activities:

  • The company has received three product design assessment (or PDA) certificates from the American Bureau of Shipping for its new selective catalytic reduction (or SCR) system for large engines.
  • Tenneco discontinued its Marzocchi motor bike fork suspension business and its mountain bike business and liquidated its Marzocchi operations.
  • The company has showcased its innovative Clean Air and Ride Performance solutions designed to meet global automakers’ demand for products that reduce emissions and improve fuel efficiency and vehicle performance.
  • The company launched two suspension technologies in its Monroe Intelligent Suspension portfolio.
  • The company unveiled electronically designed valves to support low pressure exhaust gas recirculation (or EGR) for diesel engines and acoustic tuning for gasoline engines. At the 2015 Frankfurt Motor Show, the company featured a unique new modular design that offers vehicle manufacturers custom flexibility and adaptability for any engine architecture.

About Tenneco

Tenneco designs, manufactures, and distributes clean air and ride performance products and systems for the automotive, commercial truck, and off-highway markets and aftermarkets. It serves passenger car, light truck, on- and off-road commercial vehicle, locomotive, agricultural, construction, marine, forestry vehicle, mining vehicle, two-wheeler, and off-road recreational markets.

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