Tenneco Automotive has reported net income of $US1 million, or two cents per share, in the first quarter of 2003, versus a net loss of $2 million, before the cumulative effect of a change in accounting principle, for the first quarter of 2002.
First Call’s analyst consensus estimate for the quarter was a loss of four cents per share.
Go deeper with GlobalData
The first quarter 2003 results include pre-tax restructuring and restructuring related costs of $5 million, or seven cents per share, and a tax benefit from resolution of outstanding tax issues of $3 million, or eight cents per share.
The company reported revenue of $921 million for the quarter, up 14% versus $809 million in the first quarter of 2002. Favourable currency exchange rates benefited revenue by $54 million in the quarter. Excluding the impact of currency, revenue was up seven percent.
“We are pleased with our results, especially given industry and economic uncertainties at the beginning of the year,” said Tenneco Automotive chairman and CEO Mark Frissora.
“We benefited this quarter from our strong position on top-selling vehicle platforms as North American OE production volumes remained strong. We also continue to see steady improvement in our European original equipment exhaust business where revenues are up year-over-year, and gross margins improved over last quarter and are now even with first quarter 2002.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData“We still face challenges in the global aftermarket and are aggressively taking costs out of the businesses, including flexing our operations.”
The company generated $10 million in positive cash flow before financing activities during the quarter compared with $14 million in the first quarter of 2002. The company used more cash in the quarter, compared with first quarter 2002, primarily to prepare for platform launches and for seasonal inventory builds. More aggressive receivables and payables management steps were taken in the quarter to offset this heavier cash use and to help preserve liquidity given the uncertainties in the market for the second quarter of 2003. Total bank and bond debt was $1.443 billion at quarter-end compared with $1.445 billion at the end of 2002.
The company realised $6 million in savings during the quarter from implementation of its Project Genesis restructuring program and $6 million in savings from Six Sigma initiatives. SGA&E (selling, general and administrative expense plus engineering, research and development expense) as a percent of sales was 11.6%, within management’s goal for the year of maintaining this ratio at less than 12%.
Strong OE production and the company’s presence on high volume OE vehicle models drove North American original equipment revenue to $373 million in the quarter, a 9% increase over first quarter 2002 revenue of $341 million. Excluding catalytic converter pass-through sales, revenue increased 12%.
North American aftermarket revenue was $108 million versus $126 million one year ago. Sales were negatively impacted by lower consumer confidence and the continued universal decline in the exhaust market.
European original equipment revenue increased 30% to $269 million from $207 million in the first quarter of 2002. Excluding catalytic converter pass-through sales and the impact of favourable currency exchange rates, revenue would have increased 5%.
European aftermarket revenue increased to $76 million, versus $65 million one year ago. Excluding the impact of currency, revenue would have decreased 4%.
Asian operations reported revenue of $36 million, versus $18 million one year ago. Revenue growth was primarily driven by strong China OE volumes and higher pass-through sales.
In South America, the company reported revenue of $26 million, flat compared with the previous year. Unfavourable currency exchange rates negatively impacted revenue by $7 million, which was offset by stronger OE and aftermarket volumes.
Australian operations reported revenue of $33 million for the quarter, a 27% increase over first quarter 2002 revenue of $26 million. A favourable currency exchange rate impacted revenue by $4 million. Strong OE production offset softer sales in both the ride control and exhaust segments of the aftermarket.
