Tenneco Shares Fall After Analyst Downgrade

NEW YORK (AP) — Shares of auto-parts supplier Tenneco Inc. fell on Monday as an analyst cut his rating to "Sell," saying the company is not expected to return to profitability until 2011 amid the weak market for automotive parts.

Standard & Poor's Equity Research analyst Efraim Levy downgraded Tenneco from "Hold" in a note to investors on Monday. He expects the Lake Forest, Ill.-based company to post a third-quarter loss of 4 cents per share and a full-year loss of $1.01 per share.

Analysts surveyed by Thomson Reuters call for a smaller third-quarter loss of 2 cents per share and a full-year loss of 88 cents per share.

Tenneco last posted a profit in the fourth quarter of 2008.

Shares of Tenneco have rallied sharply this year, climbing more than fivefold year to date. Levy said the shares are overpriced and predicted September vehicle sales will fall "sharply," though auto production is likely to increase again due to shortages of some vehicles.

Several analysts have predicted a September sales slump after many people who planned to buy cars rushed to take advantage of the popular Cash for Clunkers program during the summer.

Citi Investment Research analyst Itay Michaeli estimated Monday that the annualized September sales rate is around 9.5 million units. That's down from 14.1 million in August.

Tenneco shed 76 cents, or 5.2 percent, to $14 in late afternoon trading.