Tenneco Automotive has reported improved first quarter net income of $7 million, or 16 cents per diluted share, compared with a net loss of $2 million, or 5 cents per share a year ago.
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The company improved net income despite North American OE production cuts and higher steel prices globally. Adjusted first quarter net income increased to $9 million, or 20 cents per share, compared with $6 million, or 15 cents a share.
“We are pleased with our performance this quarter, especially in light of tough market conditions with slowing OE production in North America and the ongoing high cost of steel worldwide,” said , Tenneco Automotive chairman and CEO Mark Frissora.
Tenneco Automotive reported its twelfth consecutive quarter of year-over-year revenue growth with $1.106 billion in the quarter, compared with $1.033 billion in first quarter 2004. Favorable currency exchange rates benefited revenue by $37 million. Incremental new OE business; higher heavy duty and specialty vehicle volumes; strong Japanese OE transplant business (21% of North America OE sales); and improved North America aftermarket sales drove the increase.
The company’s gross margin in the quarter was 19.3%, compared with 19.7% a year ago. Restructuring impacted gross margin by 0.1% in the quarter and 0.3% in Q1 2004. This year, higher net steel costs also had a 0.8% impact, more than accounting for the year-over-year decline in gross margin.
Steel cost increases for the first quarter, net of other material cost savings and recovery from OE and aftermarket customers, were $9 million. The company still expects its total 2005 steel cost increases, net of other material cost savings and recovery from customers, will be between $30 million and $50 million.
