LAKE FOREST, Ill. — Tenneco Inc. has reported a significant increase in net income to $30 million, or 49 cents per diluted share, versus $10 million, or 17 cents per diluted share, in the third quarter of 2010.
 
“Our revenue this quarter reflects Tenneco’s excellent growth opportunities with our position on strong-selling vehicles worldwide and expansion into the commercial vehicle segment, where our launch execution is on track and delivering results,” said Gregg Sherrill, chairman and CEO, Tenneco. “Our earnings continue to improve, driven by strong performances globally, despite headwinds of higher year-over-year operational costs in the North America OE ride control business.”
 
Total revenue in the quarter was $1.773 billion, up 15 percent from $1.542 billion a year ago. Value-add revenue (revenue minus substrate pass thru sales) was $1.373 billion, up 16 percent year-over-year versus $1.185 billion. Stronger OE volumes on current and new platforms drove the increase, coupled with a 9 percent rise in global aftermarket sales. The launch and ramp-up of new commercial vehicle platforms grew commercial and specialty vehicle OE revenue to 12 percent of total OE revenue. Revenue included $51 million in favorable currency.
 
Capital expenditures in the quarter were $50 million versus $34 million a year ago. These investments were primarily to support emission control technology applications for new customer programs and continued capacity investments for expanding business in China. The company still expects its capital expenditures to be in the range of $190 million to $210 million for full-year 2011.

Separately, Tenneco paid $4 million to acquire the remaining 25 percent interest in the company’s emission control joint venture in Thailand, now wholly-owned by Tenneco.
 
In the third quarter, Tenneco repurchased 129,500 shares of its outstanding common stock for $5 million, completing a previously announced 400,000 share stock buyback plan to offset dilution from shares issued to employees in 2011.
 
Outlook
Overall, IHS Automotive forecasts that production will increase 2 percent in the regions where Tenneco operates. Light vehicle production is expected to be up 12 percent in North America, 2 percent in China, 1 percent in South America and 8 percent in Australia. Europe is forecasted to be down 2 percent and India down 8 percent.
 
Tenneco continues to launch and ramp-up production on new commercial vehicle programs in North America, Europe, China and South America. The company said it remains confident in its total OE revenue guidance for 2011. It now expects that commercial vehicle OE revenue will be approximately $650 million for the full year, entirely due to lower volumes related to launch timing and ramp-up schedules, primarily in the Europe segment.
 
“In the fourth quarter, we expect our revenue growth to continue outpacing global industry light vehicle production due to our strong platform position worldwide and incremental commercial vehicle revenue,” said Sherrill. “We are executing well on our growth plans fueled by our advanced technology, application engineering capabilities and expanding presence in the fastest-growing markets. In the third quarter, we expanded our commercial vehicle customer base by winning new emission control business with a commercial vehicle customer in Japan.”