LAKE FOREST, Ill. -- Tenneco has reported first quarter net income of $7 million, or 11 cents per diluted share, compared with a net loss of $49 million, or $1.05 per diluted share in the first quarter of 2009. Adjusted for the items below, net income was $15 million, or 25 cents per diluted share, versus a net loss of $29 million, or 61 cents per diluted share, a year ago.

First quarter revenue was $1.316 billion, up 36 percent from $967 million a year ago. Excluding substrate sales and positive currency of $61 million, revenue was $999 million, up 31 percent from $765 million in first quarter 2009. Revenue increased as a result of higher OE production volumes across all regions and in both product lines, new platform launches, and higher aftermarket sales in North America and South America.

“Globally, we are converting stronger production volumes and year-over-year revenue growth to the bottom-line as we continue to benefit from cost structure changes and ongoing operational improvements,” said Gregg Sherrill, chairman and CEO, Tenneco. "We’re also seeing strengthening in our global aftermarket, which provides good balance to our business.”

Cash flow from operations improved $86 million year-over-year after applying a previously announced 2010 accounting rule change to last year’s cash performance.

Tenneco ended the quarter with net debt at $1.146 billion, a $328 million reduction from $1.474 billion a year ago. As a comparison, net debt was down $390 million if the accounting change for accounts receivable securitization programs had been in effect last year.

“Generating cash and reducing debt remain top priorities for Tenneco and we made excellent progress this quarter in further strengthening our balance sheet,” said Sherrill. “Our cash performance was driven by improved earnings and efficiently managing all components of working capital in a stronger production environment. Beyond the benefit from our common stock offering in the fourth quarter of 2009, we significantly improved our financial position as a result of this strong cash performance.”

As forecasted by Global Insight at the beginning of the year, the OE production environment in North America is strengthening, now on track to be about 10.9 million units in 2010. Projections for Europe OE production remain fairly stable at about 17.6 million units this year and China continues to expand at a rapid pace with production estimates of 15.6 million units this year.

“The industry continues to recover and customer production schedules are meeting forecasted rates, which will help drive our top-line growth as we leverage stronger OE production volumes globally and benefit from the strength of our global aftermarket,” said Sherrill. “We will continue our drive to improve profitability as we operate from a lower cost structure and maintain our relentless focus on operational excellence. This focus, along with executing on our commercial vehicle launches beginning later this year, are key to us taking full advantage of all our growth opportunities.”