Tenneco Inc. has reported record first quarter net income of $63 million, or $1.16 per diluted share, compared with $57 million, or 99-cents per diluted share in first quarter 2016. Adjusted net income increased 24 percent to a first quarter record high of $83 million, compared with $67 million last year. First quarter adjusted earnings per share also rose to a new record high of $1.53 per diluted share, a 31 percent improvement year-over-year.
Total revenue in the first quarter was $2.292 billion, up 7 percent year-over-year, driven by higher revenue in both the Clean Air and Ride Performance product lines.
On a constant currency basis, total first quarter revenue increased 9 percent to $2.329 billion, outpacing industry production growth of 6 percent.* The company said record revenue in the quarter reflects an 11 percent increase in light vehicle revenue on the strength of the company’s global platform position. Commercial truck revenue increased 15 percent, outpacing industry growth of 5 percent. Off-highway revenue was about even with last year on continuing weak industry production. Global aftermarket revenue also was about even with a year ago.
In constant currency, value-add revenue increased 9 percent versus last year, and included 10 percent growth in Clean Air revenues, and 7 percent higher Ride Performance revenue.
“We started the year strong by delivering another record quarter with our highest-ever first quarter revenue, EBIT, net income and earnings per share,” said Gregg Sherrill, chairman and CEO, Tenneco. “The strong balance across our business in terms of regions, end-markets, customers and products helped us deliver another quarter of profitable growth as we executed well on growth plans for each product line.”
Outlook
In the second quarter, Tenneco expects year-over-year revenue growth of approximately 5 percent on a constant currency basis, outpacing estimated light vehicle industry production growth* by four percentage points. Based on current exchange rates, the company anticipates approximately 2 percent currency headwind in the second quarter.
The company’s organic revenue growth is expected to be driven by Clean Air and Ride Performance content on top-selling light vehicle platforms globally; continued strong commercial truck growth; and a steady contribution from the global aftermarket.
Full Year 2017
Tenneco also reaffirms its full-year revenue growth outlook announced in January. On a constant currency basis, the company expects year-over-year revenue growth of 5 percent, outpacing estimated light vehicle industry growth by 4 percentage points. The company also expects annual margin improvement in 2017.
“Tenneco continues to have outstanding growth opportunities, supported by sustainable drivers and a technology portfolio aligned with positive market trends globally,” said Sherrill. “With distinct growth strategies for each product line, and our continuous improvement culture, we are making strong progress on our growth objectives and executing well to further drive higher earnings and improve profitability.”
*Source: IHS Automotive April 2017 global light vehicle production forecast and Tenneco estimates.
