Tenneco beats estimates, cuts pay

Tenneco Inc., the world's largest maker of vehicle-exhaust systems, posted a first-quarter loss narrower than analysts' estimates and said it will reduce salaried employees' pay to save money.

Excluding one-time costs for moves such as job cuts, the loss of 61 cents a share beat the $1.24 average estimate of 7 analysts surveyed by Bloomberg. Tenneco's net loss was $49 million, or $1.05 a share, compared with net income a year earlier of $6 million, or 13 cents.

Tenneco's third straight quarterly deficit reflects automakers' cuts in global output as sales slumped. The Lake Forest-based supplier suspended contributions to employees' 401(k) retirement accounts and reduced pay for the top 50 executives by 60 percent in February to save costs.

"Production volumes continued to decline to extremely low levels with no region of the world unaffected," Chief Executive Officer Gregg Sherrill said today in a statement.

Inventory reductions generated a $77 million year-over-year improvement in cash flow, Tenneco said. The company trimmed selling, general, administrative and engineering expenses by 30 percent to $99 million.

The supplier's sales fell 38 percent to $967 million.

Tenneco said the pay reductions would be temporary as it seeks to reduce costs for salaried employees by 10 percent.

"These plans are being tailored to each of its markets and include salary cuts and work-hour reduction programs," Tenneco said in the statement. "Executives at the most senior levels have taken larger salary reductions."

General Motors Corp. was Tenneco's largest customer at 20 percent of the supplier's $5.92 billion in revenue last year, and Ford Motor Co. was second at 11 percent, according Connexiti, a research company in New York.

Tenneco, which has about 21,000 employees globally, makes products such as mufflers, tailpipes, and shock absorbers.