Supplier Tenneco reported “a significant increase” in net income to US$30m, or 49 cents a share for Q3 2011 , versus $10m, or 17 cents a share, in third quarter 2010.
Adjusted net income increased to $42m, or 67 cents a share, versus $24m, or 39 cents a share, a year ago.
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“Our revenue this quarter reflects Tenneco’s excellent growth opportunities with our position on strong-selling vehicles worldwide and expansion into the commercial vehicle segment, where our launch execution is on track and delivering results,” said Gregg Sherrill, chairman and CEO.
“Our earnings continue to improve, driven by strong performances globally, despite headwinds of higher year-over-year operational costs in the North America OE ride control business.”
Total revenue in the quarter was $1.773bn, up 15%.
Stronger OE volumes on current and new platforms drove the increase, coupled with a 9% rise in global aftermarket sales. The launch and ramp-up of new commercial vehicle platforms grew commercial and specialty vehicle OE revenue to 12% of total OE revenue. Revenue included $51m in favourable currency effects.
EBIT (earnings before interest, taxes and noncontrolling interests) was $84m, a record high for the third quarter and up from $67m a year ago. Adjusted EBIT improved to $99m, compared with $77m in third quarter 2010.
“We remain focused on continuing to improve our operating margins globally including in North America where we are addressing operational issues in our ride control business as we transition and consolidate production at one of our plants,” said Sherrill.
IHS Automotive has forecast that production will increase 2% in the regions where Tenneco operates. Light vehicle production is expected to be up 12% in North America, 2% in China, 1% in South America and 8% in Australia. Europe is forecast to be down 2% and India down 8%.
The company remains confident in its total OE revenue guidance for 2011 and now expects that commercial vehicle OE revenue will be approximately $650m for the full year, entirely due to lower volumes related to launch timing and ramp-up schedules, primarily in Europe.
“In the fourth quarter, we expect our revenue growth to continue outpacing global industry light vehicle production due to our strong platform position worldwide and incremental commercial vehicle revenue,” said Sherrill.
