LAKE FOREST, Ill. — Tenneco Inc. has pushed back the timetable for its separation into two standalone companies, with the spin-off of the DRiV Inc. aftermarket parts supplier expected to occur in mid-2020.
Tenneco, which acquired auto parts competitor Federal Mogul Corp. in 2018, originally targeted the second half of 2019 for its split into two independent, publicly held companies: DRiV with a portfolio that includes Monroe, Champion, Öhlins, MOOG, Walker, Fel-Pro, Wagner, Ferodo Rancho, Thrush, National, Sealed Power and Axios brands, among others; and Tenneco, which would focus on powertrain systems technology.
The announcement came as Tenneco declared its second-quarter financial results: A 78% surge in sales to $4.5 billion, compared with the year-ago period, with acquisitions accounting for $1.9 billion of that total.
On a constant currency pro forma basis, revenue increased 1% over 2018.
Second-quarter EBIT increased 27% to $141 million, including the acquired Federal-Mogul business. Second-quarter adjusted EBITDA surged 81.2% to $414 million.
Net income for the period ended June 30 plummeted 44.7% to $26 million while the adjusted net income edged up 1% to $97 million, after taking the Federal-Mogul acquisition into account.
"Tenneco's revenue growth outpaced industry production by nine percentage points, driven by higher light vehicle, commercial truck and off-highway revenues," Tenneco Co-CEO Brian Kesseler said. "We delivered sequential earnings improvement on flat revenue quarter to quarter, with disciplined cost management and effective synergy capture actions."
Tenneco expects third-quarter revenue in the range of $4.3 billion to $4.4 billion and its adjusted EBITDA to be in the range of $390 million to $410 million.
"In the third quarter, we expect our revenues to outgrow the markets we serve," Tenneco Co-CEO Roger Wood said. "More importantly, we anticipate higher margins on a year-over-year basis in both divisions supported by operational performance improvements, synergy realization and our continued focus on eliminating waste and cost throughout the business."
The company updated its 2019 full-year outlook and now expects revenues in the range of $17.6 billion to $17.8 billion; adjusted EBITDA of $1.52 billion to $1.57 billion; and capital expenditures of about $730 million.