Emission and ride control specialist Tenneco has reported third quarter net income of $US21m, or 45 cents per share, up from $7m, or 16 cents per share in third quarter 2006.
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Adjusted net income was $19m, or 39 cents per share, versus net income of $11m, or 26 cents per share a year ago.
EBIT (earnings before interest, taxes and minority interest) was $57m, a 31% increase over $43m a year ago while adjusted EBIT was $65m, versus $50m in third quarter 2006. Strong OE volumes in North America from new diesel platform launches and growth in China drove the improvement, the company said on Tuesday.
Third quarter revenue rose to $1.556bn from $1.121bn in third quarter 2006. Revenue in the quarter included $430m in substrate sales, a 94% increase over third quarter 2006. Excluding substrate sales and favourable currency of $68m, revenue was $1.069bn versus $900m a year ago. The revenue increase was driven by volume ramp-ups on platform launches in North America and higher OE revenues in Europe and Asia, more than offsetting lower aftermarket sales in North America and Europe.
Gross margin in the quarter was 15.6% versus 17.5% in third quarter 2006. Higher substrate sales – 28% of total revenue compared with 20% a year ago – accounted for 1.7 percentage points of the decline.
Tenneco said steel costs in the quarter increased $20m year-over-year, which it offset with cost reductions, material substitutions, low cost country sourcing and steel cost recovery from customers. The company anticipates that its gross steel costs in the fourth quarter will increase approximately $25m, year-over-year.
Tenneco chairman Gregg Sherrill said: “We don’t expect global market conditions to change significantly through the remainder of the year. While industry light vehicle production in North America is projected to be down year-over-year in the fourth quarter, we believe continued growth from our North American diesel pick-up truck platform launches and a favourable platform mix will help us better manage these production declines.”
