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Tenneco Hits 52-Week High

Zacks Equity Research

Shares of Tenneco Inc. (TEN) hit new 52-week high of $45.02 on May 30, which is above its previous level of $44.44. Their last closing price of $44.36 represented a solid one-year return of 63.4% and year-to-date return of 21.5%.

Tenneco, based in Lake Forest, IL, is a leading manufacturer and supplier of emission control, ride control systems, and systems for the automotive original equipment manufacturers (OEMs) and the aftermarket. It has a market cap of $2.7 billion. Average volume of shares traded over the last three months stood at approximately 678.6K.

Shares of the company started escalating following its improved first quarter results and promising guidance announced on Apr 29.

Tenneco reported a 9.1% increase in adjusted earnings per share to 72 cents in the first quarter of 2013 from 66 cents a year ago, surpassing the Zacks Consensus Estimate by 7 cents. Net income augmented 7.3% to $44.0 million from $41.0 million a year ago.

On a reported basis, the company’s profit was $54.0 million or 88 cents per share compared with $30.0 million or 49 cents in the first quarter of 2012.

Revenues increased marginally to $1.90 billion, beating the Zacks Consensus Estimate of $1.84 billion. The year-over-year increase in revenues was attributable to higher revenues from Clean Air division, partially offset by decline in revenues from Ride Performance.

Based on IHS forecasts, the company expects that total light vehicle production will increase 3% in the second quarter of 2013, with a 4% rise in North America, 8% hike in China, 9% increase in South America and 3% boost in India. However, it will decline 3% in Europe due to the economic uncertainty.

Currently, shares of Tenneco retain a Zacks Rank #3, which translates to a short-term rating (1–3 months) of Hold. Some other stocks that are performing well in the industry include Visteon Corp. (VC), STRATTEC Security Corporation (STRT) and Tower International Inc. (TOWR). They carry a Zacks Rank #1 (Strong Buy).

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