Tenneco (TEN), which supplies emissions control, suspension, and powertrain components and modules to the global automotive industry as well as offering aftermarket parts, reported disappointing first-quarter diluted earnings per share before special items of $0.52, missing the $0.95 consensus estimate by a country mile and down $1.56 versus last year. Revenue did jump 74% to $4.5 billion, including recently acquired Federal-Mogul. Adjusting for currency, acquisitions, and divestitures, organic revenue increased 1%, representing an 8-percentage-point outperformance versus the 7% decline in global light-vehicle production.
Management lowered its 2019 revenue outlook to $17.7 billion-$18.1 billion from $18.2 billion-$18.4 billion. It now expects adjusted EBITDA margin (excluding pass-through catalytic converter business and special items) to be 10.0%-10.6%, down from prior guidance of flat with 2018’s 10.6%. Management also said it will postpone the spin-off of DRiV to mid-2020 from the second half of 2019, allowing additional time to integrate the respective businesses and deleverage the balance sheet while the operating environment remains unfavorable.
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Richard Hilgert does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.