CHICAGO -- Auto parts supplier Tenneco Automotive Inc. on Tuesday said quarterly earnings rose on strong demand for its ride control and exhaust products that helped offset higher steel and transportation costs.
Tenneco said it expects the operating environment to remain tough because of higher costs, vehicle output rates in North America and Europe and is watching for a potential drop in vehicle maintenance spending because of higher fuel prices.
Tenneco Automotive Inc. ranks No. 43 on the Automotive News list of the top 100 global suppliers with worldwide original-equipment automotive parts sales of $3.21 billion in 2004.
Net income rose to $10 million, or 23 cents per share, in the third quarter, from $6 million, or 14 cents per share, a year earlier, said Tenneco, which makes shock absorbers and exhaust systems.
Excluding restructuring items, Tenneco earned 27 cents per share. Analysts, on average, expected the Lake Forest, Illinois-based company to earn 26 cents per share, according to Reuters Estimates.
Net sales rose 10 percent to $1.1 billion.
Gross margin fell 1.2 percentage points to 18.9 percent, hurt by higher steel costs, fuel surcharges for transportation and shifting business mixes between Europe and North America, and between original equipment and replacement parts.