Tenneco rides big tax gain to $125M 3rd-qtr profit
LAKE FOREST, Ill. (AP) — Auto parts maker Tenneco Inc. reported a $125 million third-quarter profit Thursday, quadrupling its earnings from a year earlier thanks largely to a large tax gain. The result far surpassed Wall Street's expectations and its stock soared.
Tenneco said net income for the July-through-September period amounted to $2.05 per share and was up from $30 million, or 49 cents per share, in the third quarter of 2011.
Results included a tax-related benefit of $74 million, or $1.22 per share, mostly from the reversal of an accounting treatment for money previously set aside to cover taxes.
Aside from that gain, the Lake Forest, Ill.-based company said its adjusted earnings were 85 cents per share, a full 10 cents per share better than the average estimate of analysts polled by FactSet.
Revenue was $1.78 billion, virtually unchanged from $1.77 billion a year earlier and below analysts' forecast for $1.82 billion.
Despite the flat revenue, investors focused on the unexpectedly strong earnings, pushing up Tenneco's shares $4.43, or 16.5 percent, to $31.22 in midday trading.
The company cited stronger light vehicle production volumes in North America and China and higher global revenue from commercial vehicles. Commercial and specialty vehicle revenue rose 8 percent from a year earlier to $184 million, representing just over 10 percent of total revenue.
Tenneco said, however, that commercial vehicle markets around the world continue to be softer than anticipated and that weakness is expected to continue.