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Tenneco Inc Class A TEN

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Tenneco Starts 2021 with Strong Q1 Results, Raises 2021 Guidance; Raising FVE to $31.50

Richard Hilgert Senior Equity Analyst

Analyst Note

| Richard Hilgert |

No-moat-rated Tenneco reported first quarter adjusted earnings per share (EPS) of $1.09, blowing past the $0.66 FactSet consensus EPS estimate by $0.43. Value-added (VA) revenue (excludes pass-through catalytic converter) increased 16% to $3.6 billion from $3.1 billion last year. Excluding currency, organic VA revenue rose 13% on COVID-19 recovery in China and strong commercial truck, off-highway, and industrial markets. Adjusted EBITDA was $388 million, up 62.3% from $239 million reported a year ago. Margin to VA revenue expanded 310 basis points to 10.7% on higher volume and the company’s turnaround program. Quarter-end liquidity was healthy at $2.1 billion, including $626 million in cash and $1.5 billion available revolver. Due to operating results, lower capital expenditures, and despite an unfavorable $167 million working capital swing on higher business activity, first quarter seasonal cash usage improved to $95 million from $137 million.

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Company Profile

Business Description

Tenneco's emissions-control products meet strict air-quality legislation, optimize engine performance, improve fuel economy, and acoustically tune engine sound to fit a vehicle's profile. Ride-control products enhance safety by enabling improved steering, braking, and acceleration as well as ride comfort. Champion, Fel-Pro, Moog, Monroe, and Walker are some of Tenneco's well-known aftermarket brands. In 2020, 40% of revenue came from North America, 37% from Europe, 18% from China, and 5% other regions.

500 North Field Drive
Lake Forest, IL, 60045
T +1 847 482-5000
Sector Consumer Cyclical
Industry Auto Parts
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 73,000