DOW JONES NEWSWIRES
Tenneco Inc. (TEN) swung to a first-quarter loss as the
auto-parts maker continues to suffer under tumbling vehicle
production.
But a sequential rise in margins, helping the loss come in
narrower than analysts expected, suggest the company's
restructuring efforts are helping weather the economic
downturn.
"This was a very challenging quarter, as production volumes
continued to decline to extremely low levels" said Chairman Gregg
Sherrill.
Parts suppliers like Tenneco are in a precarious spot as auto
makers pare swollen inventories, particularly in North America,
forcing them to idle plants.
The company - which makes shock absorbers, suspensions and
manifolds - posted a net loss of $47 million, or $1.05 a share,
compared with year-earlier net income of $6 million, or 13 cents a
share. Excluding restructuring and other costs, the latest loss
would have been 61 cents.
Net sales dropped 38% to $967 million, with half the drop due to
the stronger dollar.
Analysts polled by Thomson Reuters predicted a loss of $1.23 on
revenue of $1.07 billion.
Gross margin fell to 14.5% from 15% but rose from the fourth
quarter's 12.6%.
But Tenneco is far from out of the woods, as Fitch Ratings noted
in its downgrade Wednesday of the company. It said Tenneco, like
other parts suppliers, face uncertain ramifications from a
bankruptcy filing by General Motors Corp. (GM) or Chrysler LLC.
Also a problem is slumping auto sales in Europe.
Tenneco shares closed Wednesday at $2.65 and were inactive
premarket. The stock is up 63% this month but is still down more
than 80% from September.
-By Katherine E. Wegert, Dow Jones Newswires; 201-938-5294;
katherine.wegert@dowjones.com