Tenneco shares soar after earnings top expectations
(Reuters) - Tenneco Inc (TEN.N) reported a quarterly adjusted profit on Thursday that beat Wall Street expectations, sending the auto parts maker's share price up 16 percent, but it signaled that it will sustain losses in Europe due to slow auto sales there.
Tenneco's net income of $125 million, or $2.05 per share was inflated by the benefit of $74 billion, or $1.22 per share, primarily based on the reversal of a U.S. tax valuation allowance.
Excluding one-time items, Tenneco's third-quarter adjusted profit was $52 million, or 85 cents per diluted share, compared to $42 million, or 67 cents per diluted share. Its profit excluding one-time items of 85 cents beat analyst expectations of 75 cents per diluted share, according to Thomson Reuters I/B/E/S.
Tenneco shares were last trading up 16.3 percent at $31.12.
"While Tenneco enjoys a strong customer and platform position, the company anticipates lower year-over-year revenue decline" for Europe, both for its new-vehicle business and in the aftermarket, Tenneco said in a statement.
In the third quarter, Tenneco's revenue was essentially flat, at $1.778 billion from $1.773 billion a year earlier.
Tenneco also said it expects fourth-quarter auto industry production in North America and China to strengthen compared with last year, but for the decline in Europe to continue.
(Reporting by Bernie Woodall, editing by Gary Crosse)