March 29, 2024

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Tenneco Q1 revenue, profits slump on COVID-19 impact

Tenneco Inc.’s income slumped and the organization swung to an adjusted internet reduction in the initial quarter as automakers suspended output due to the fact of the coronavirus pandemic, the supplier mentioned Friday.

The maker of ride command and emissions methods mentioned initial-quarter income fell fourteen p.c to $three.84 billion. The organization estimates the COVID-19 disaster affected worth-incorporate income by $340 million.

Tenneco’s initial-quarter internet reduction widened to $839 million from a reduction of $117 million last calendar year. The internet reduction included noncash impairments of $854 million.

Its adjusted internet reduction was $26 million, in contrast with cash flow of $forty two million in the calendar year-before time period. Altered earnings ahead of fascination, taxes, depreciation and amortization dropped 27 p.c to $239 million.

Shares of Tenneco were up 15 p.c to $five.21 in early investing Friday . Tenneco joins a number of other key suppliers, like Aptiv, Adient, BorgWarner and Magna, in reporting quarterly earnings this week.

“Tenneco responded speedily to the COVID-19 disaster to defend our group members’ health and fitness and protection whilst using aggressive actions to mitigate the economic effect of the pandemic on the organization,” CEO Brian Kesseler mentioned in a statement. “We expanded on the structural expense reductions launched last quarter, and implemented a variety of momentary expense reductions like plant closures, deferment of discretionary spending and the reduction of capital expenditures.”

The organization mentioned about seventy five p.c of its plants and distribution facilities around the globe are functioning at several concentrations of output as of the initial week of Might, up from a low of 47 p.c for the duration of the initial week of April.

Like other suppliers, Tenneco withdrew is 2020 outlook and mentioned Friday it is not going to deliver total-calendar year steering due to the fact of uncertainty related to the virus pandemic.

As of March 31, Tenneco experienced liquidity of $1.57 billion, made up of $770 million dollars and $800 million undrawn on its revolving credit history facility. The organization mentioned it has drawn the remaining total available.

The organization mentioned it thinks it has satisfactory liquidity to climate the downturn.

Tenneco, whose greatest shareholder is activist trader Carl Icahn, designs to split into two publicly traded organizations — 1 from its aftermarket and ride-functionality small business DRiV and a new Tenneco, dependent on its powertrain technological innovation. But it has struggled to independent because the plan was introduced in 2018.

The organization mentioned beforehand that marketplace situations could influence its ability to full a separation in the midyear 2020 time variety.

Tenneco ranks No. 26 on the Automotive Information record of the prime a hundred world wide suppliers, with around the globe gross sales to automakers of $10 billion in 2018.

Reuters contributed to this report.