Why Shares of Tenneco Jumped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of vehicle part manufacturer Tenneco (NYS: TEN) rose 10% today after the company released second-quarter earnings.

So what: Tenneco said that revenue rose 1.7% to $1.92 billion, which was below estimates of $2.03 billion, but the bottom line made up for that miss. Earnings per share were $1.14, exceeding the $0.97 analysts had expected by a wide margin.

Now what: Europe was a drag on the quarter, as it has been for most companies reporting earnings. But the strong bottom-line numbers have given investors confidence that the company can leverage its business despite the fact that revenue isn't growing. If it can, the stock should continue to rise because the company's forward earnings multiple is just 6.7, a cheap valuation if it can sustain the current earnings momentum.

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The article Why Shares of Tenneco Jumped originally appeared on Fool.com.

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