Tenneco's (TEN) Q2 Loss Wider Than Expected, Sales Beat

Tenneco Inc. TEN incurred an adjusted loss of 82 cents per share in second-quarter 2022 against the year-ago earnings of 84 cents. The figure was wider than the Zacks Consensus Estimate of a loss of 52 cents. Revenues of $4,665 million topped the consensus estimate of $4,587 million and increased 2% year over year.

Segmental Performance

In the reported quarter, the Clean Air division's revenues summed $2,137 million, increasing 5.6% from the year-ago figure of $2,024 million. Adjusted EBITDA totaled $107 million in the quarter, decreasing 26.7% from $146 million reported in the prior-year quarter.

Revenues in the Performance Solutions division amounted to $791 million, increasing 10.6% from $715 million recorded in the year-earlier period. Adjusted EBITDA totaled $24 million in the quarter, decreasing 42.8% from $42 million.

The Powertrain division's revenues amounted to $1,008 million in the quarter, registering a 4% decline from $1,050 million in the year-earlier period. Adjusted EBITDA totaled $59 million and declined 42% from $102 million.

The Motorparts division's revenues were $729 million, down 8.2% from $794 million a year ago. Adjusted EBITDA totaled $73 million in the quarter, falling 38% from $118 million.

Financials & Outlook

Tenneco had cash and cash equivalents of $389 million as of Jun 30, 2022, down from $859 million as of Dec 31, 2021. Long-term debt totaled $4,934 million, down from $5,018 million as of Dec 31, 2021. During the reported quarter, the company's net cash used by operating activities was $181 million compared with the year-earlier quarter's $73 million cash provided by operating activities. As of Jun 30, 2022, it did not have outstanding borrowings on its $1.5 billion revolving credit facility.

Tenneco has not provided any guidance for 2022 on account of its pending takeover by Apollo Global Management, which was announced in February 2022. The transaction is expected to close in the second half of the year.

Zacks Rank & Key Picks

TEN carries a Zacks Rank #3 (Hold), currently.

Better-ranked players in the auto space include Harley-Davidson HOG, Genuine Parts Company GPC and PACCAR Inc. PCAR, each carrying a Zacks Rank #2 (Buy), currently.

Harley-Davidson has an expected earnings growth rate of 6.9% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised 7% upward in the past 30 days.

Harley-Davidson's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed in one. HOG pulled off a trailing four-quarter earnings surprise of 49.52%, on average. The stock has declined 6.8% in the past year.

Genuine Parts has an expected earnings growth rate of 15% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised 1.3% upward in the past 30 days.

Genuine Parts' earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. GPC pulled off a trailing four-quarter earnings surprise of 11.03%, on average. The stock has risen 20.7% over the past year.

PACCAR has an expected earnings growth rate of 45.3% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised 7.4% upward in the past 30 days.

PACCAR's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed in one. PCAR pulled off a trailing four-quarter earnings surprise of 7.44%, on average. The stock has risen 13.5% in the past year.

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