UPDATE 2-Tenneco posts higher quarterly profit

(Adds analysts comments, updates stock action)

DETROIT, April 24 (Reuters) - Auto parts maker Tenneco Inc (TEN.N: Quote, Profile, Research, Stock Buzz) posted a higher quarterly profit on Thursday as growth in Asia and significant profit improvement in Europe offset the weak North American market.

But the company said it expects little change in industry conditions the rest of the year. The maker of emissions and ride control parts such as mufflers and shocks also anticipates automaker production volumes in North America will fall from last year.

Its shares were down 3.5 percent.

Robert W. Baird analyst David Leiker said in a research note that the company's operating results were disappointing due to higher-than-expected research and operating costs. However, he maintained his "outperform" rating due to good long-term prospects.

Lehman Brothers analyst Brian Johnson said in a research report that the profit could be viewed as of "lower quality" as earnings before interest and taxes missed his estimate but that was more than offset by a surprisingly large decrease in interest expense.

Johnson said the company may have benefited from lower interest rates on its variable debt, which makes up a significant portion of its total debt. He has a "neutral" rating on the stock.

The softening economy and tight credit markets have led consumers to put off making large purchases like new cars. Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz) on Thursday cut its 2008 U.S. sales outlook for the year, while larger rival General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz) the previous day said U.S. industry sales would be weaker in the second quarter from the first.

Tenneco's net income in the first quarter rose to $6 million, or 13 cents a share, compared with $5 million, or 11 cents a share, in the year earlier quarter.