Tenneco Inc. posted a 15-percent drop in net income in the first quarter of 2014 to $46 million, no thanks to one-time restructuring costs. Save for that cost, Tenneco would have posted a 27-percent climb in net income to $56 million, thanks to strong commercial vehicle profits.
Tenneco also logged a 10-percent jump in revenues to $2.09 billion in the quarter, boosted by an 11-percent surge in business from its various exhaust and emission reduction products as well as by a 7-percent jump in business from its ride control products such.
Tenneco chief executive Gregg Sherrill said in a statement that the company is planning to improve profitability with a “slightly stronger light vehicle production environment” as well as incremental revenue from its commercial truck and off-highway equipment operations.
He remarked that the company improved its profitability and margins by leveraging its top-line growth with strong operational performance. Tenneco chief financial officer Kenneth Tramell told analysts that the company is expecting between $3 million and $5 million in costs per quarter to cover with antitrust probes in Europe and the United States, according to a report by Wells Fargo analyst Rich Kwas.
The European Commission in March raided Tenneco and a number of auto exhaust systems makers that are suspected of price fixing. The commission remarked that the makers may have participated in a cartel and abused their market dominance.
Tenneco disclosed that it received a related subpoena from the US Department of Justice, which has been probing price-fixing in the US auto industry in the past years.