Tenneco reported second quarter 2020 revenue of $2.6 billion, versus $4.5 billion a year ago. 

Excluding unfavorable currency of $108 million, total revenue decreased 39% versus last year, with the decline in revenue from lower light vehicle industry production, down 45%* versus last year, and other impacts from COVID-19.  Value-add revenue for the second quarter 2020 was $2.0 billion.

All figures in USD unless otherwise noted.

“The business impact from the pandemic in the quarter was severe for both the industry and Tenneco.  The response from the Tenneco team around the world is a testament to their dedication and resilience,” said Brian Kesseler, Tenneco’s chief executive officer. “Our production facilities safely returned to operations throughout the quarter following local and federal health guidelines. Our thoughts remain with our team members, families and communities who have been impacted by COVID-19, and we continually work to keep them healthy, both on the job and outside the workplace.”

The Company reported a net loss for second quarter 2020 of $350 million, or $(4.30) per diluted share.  Including a $113 million non-cash charge primarily related to a realignment project in its North America Aftermarket distribution network, the Company reported a second quarter 2020 EBIT (earnings before interest, taxes and noncontrolling interests) loss of $375 million. 

On an adjusted basis, second quarter 2020 EBITDA was $8 million with an EBIT loss of $149 million.  Adjusted net loss was $175 million, or ($2.15) per diluted share.

Company liquidity remained solid, with cash balances of $1.37 billion as of June 30, 2020.  Based on available industry forecasts and Company estimates, the Company believes it has adequate liquidity to weather the current downturn and expected higher demand and production levels over the next several quarters. 

“The Tenneco team’s swift and effective actions to reduce costs and preserve liquidity enabled the Company to respond well in a very challenging environment,” Kesseler continued.  “Our global footprint and the diverse end markets we serve allowed us to offset a portion of the light vehicle production demand decline in the quarter.  Earnings and cash performance were driven by effectively flexing our cost structure and working capital with both structural and temporary actions.”

Outlook
Due to the continued uncertainty of the pandemic’s effect on the global markets, the Company is not providing financial guidance for the full year.  Tenneco does expect third quarter 2020 revenue to improve substantially compared to the second quarter 2020, but lower than third quarter 2019 results. The Company also expects the benefit of incremental structural cost savings and continued capital management will drive sequential improvement in cash from operations through the second half of 2020.

“Our continuing focus on structural cost reductions and accelerating cash generation will build momentum through the remainder of this year and into 2021,” added Kesseler. “The priority we have placed on debt reduction and targeted growth investments will create a stronger Tenneco and deliver improved shareholder value.” 

*Source: IHS Automotive July 2020 global light vehicle production forecast.