LAKE FOREST, Ill. – Tenneco Inc. has reported fourth quarter net income of $33 million, or 54-cents per diluted share, compared with net income of $30 million, or 49-cents per diluted share a year ago. On an adjusted basis, net income rose to $40 million, or 66-cents per diluted share, compared with $32 million, or 53-cents per diluted share, a year ago.
These results include $5 million in fourth quarter expenses, representing 6 cents per diluted share, for deferred and long-term compensation indexed to the company’s stock price, which rose 25 percent during the quarter.
“Despite volume weakness late in the year, we recorded our highest-ever annual revenue and continued to deliver year-over-year adjusted EBIT margin improvement in the fourth quarter and the full year,” said Gregg Sherrill, chairman and CEO, Tenneco. “Our focus on operational excellence drove our earnings improvement as we effectively converted on light vehicle revenues in North America and China, and benefitted from strong execution on the launch of commercial vehicle programs. I’m also pleased with the strong cash generation driven by higher earnings and effective working capital management.”
Total revenue in the quarter was $1.753 billion compared with $1.784 billion in fourth quarter 2011. Revenue excluding substrate sales and currency increased 2 percent to $1.390 billion versus $1.364 billion a year ago. Tenneco says the increase was driven by strong light vehicle volumes in North America and China and slightly higher North American aftermarket sales, which offset declines in Europe OE volumes and aftermarket sales. Currency had an unfavorable impact of $31 million in the quarter.
Tenneco reported full year results including total annual revenue of $7.363 billion, up from $7.205 billion in 2011. Excluding substrate sales and the impact of currency, revenue increased 7 percent to $5.938 billion versus $5.527 billion the prior year. Higher light vehicle production in North America, China and India, strong aftermarket sales in North America and incremental revenue from commercial vehicle business drove record-high revenue despite lower OE volumes and aftermarket sales in Europe and South America. Total OE commercial and specialty vehicle revenue increased 22 percent year-over-year to $804 million.
The company reported net income of $275 million, or $4.50 per diluted share, compared with net income of $157 million, or $2.55 per diluted share a year ago. Adjusted net income rose to $203 million, or $3.32 per diluted share, compared with $163 million, or $2.66 per diluted share, a year ago.
For the full year 2012, the company generated $370 million in cash from operations compared with $245 million in 2011, driven by higher earnings and $54 million in working capital improvement. Total capital spending for the full year was $263 million.
During the year, Tenneco completed a stock buyback plan, repurchasing 600,000 shares of its outstanding common stock for $18 million to offset dilution from shares issued to employees in 2012.
At Dec. 31, 2012, Tenneco’s debt net of cash was $957 million, compared with $1.01 billion at the end of 2011. The company’s continued earnings improvement and strong cash generation resulted in a new all-time low net debt to adjusted EBITDA ratio of 1.5x.
The company will provide its annual guidance and outlook for 2013 on Feb. 14 during its investor and analyst meeting in New York.
