Tenneco Inc. (TEN) has announced its collaboration with Cormetech Inc., wherein both the companies will jointly design ultra-large diameter selective catalytic reduction (SCR) catalysts for marine engine applications.
According to the MARPOL Annex VI and EPA Tier IV regulations, the engines are required to reduce mono-nitrogen oxides NO and NO2 termed as NOx by 80%. To comply with the regulation, the engines need to incorporate after-treatment strategies such as SCR, which breaks nitrogen oxides into nitrogen and water. Under the alliance, the Tenneco’s SCR solution will deploy Cormetech catalysts to help the marine industry to conform to the new regulations.
NOx is generally produced when nitrogen and oxygen gases combine after any combustion and is primarily responsible for air pollution. It reacts to form smog and acid rain, which is harmful for plants, aquatic animals, and infrastructure.
Cormetech, a joint equity company, designs and manufactures tests catalysts which reduce NOx emissions. It is an industry-leading supplier of technology solution and manufacturer of highly reliable and cost effective SCR.
Tenneco, based in Lake Forest, Illinois, is a leading manufacturer and supplier of emission control, ride control systems, and systems for the automotive original equipment manufacturers (OEMs) and the aftermarket.
Tenneco reported adjusted earnings per share of 85 cents in third-quarter 2012, comfortably beating of the Zacks Consensus Estimate of 75 cents and exceeding the year-ago earnings of 67 cents. Profits escalated 23.8% to $52 million from $42 million in the year-ago quarter.
Revenues increased marginally to $1.78 billion in the quarter from $1.77 billion in the year-ago quarter. However, it was lower than the Zacks Consensus Estimate of $1.83 billion. The year-over-year increase in revenues was attributable to a rise in production of light vehicles in North America and China and higher commercial vehicle revenues.
Tenneco competes with Meritor Inc. (MTOR) and maintains a Zacks #3 Rank, which translates into a short-term (1 to 3 months) Hold rating. Currently, we have a long-term Neutral recommendation on the stock.