Two major U.S. auto suppliers on Thursday reported a combined $675 million in net losses as their customers' COVID-19 production shutdowns gutted revenue for the quarter ending June 30.
Tenneco Inc. swung to a net loss of $350 million in the second quarter from a $26 million gain the year before, the supplier said.
Its adjusted net loss was $175 million, compared with income of $97 million the year before.
The powertrain, ride performance and aftermarket parts supplier said revenue fell 42 percent to $2.6 billion because of lower light-vehicle sales.
The company reported cash balances of $1.37 billion as of June 30 and said that it has "adequate liquidity" to weather the next few quarters.
Tenneco's shares dropped 14 percent to close at $7.40 on Wall Street on Thursday.
The company said in an earnings call that it cut salary costs by at least 25 percent in the quarter. Executives reduced their salaries by 50 to 100 percent. Salary reductions will continue into the third quarter at 10 to 20 percent, Tenneco said.
The supplier said that while it will not issue a 2020 financial outlook, it expects third-quarter revenue "to improve substantially" but fall short of year-earlier results. The company also said it expects "sequential improvement in cash from operations" from continued cost savings and capital management.
"Despite the difficult times facing our industry, I remain confident in Tenneco's ability to weather the current economic downturn and emerge stronger than when we entered," CEO Brian Kesseler said.
Adient
Meanwhile, Adient reported a net loss of $325 million in its fiscal third quarter, compared with a net loss of $321 million during the same quarter in 2019.
The automotive seating supplier's revenue fell 61 percent to $1.6 billion, compared with $4.2 billion at the same time last year. Adjusted earnings before interest, taxes, depreciation and amortization amounted to a loss of $122 million, compared with a gain of $205 million in 2019.
In a statement, the company said it continues to operate at a monthly cash burn rate of $175 million, down from $300 million, through furloughs, salary reductions, shortened workweeks and reduced spending.
"Adient continues to execute its turnaround plan while navigating through these unprecedented times," Adient CEO Doug Del Grosso said in the statement. "I am confident that the many proactive actions we are taking will enable Adient to become a stronger, more profitable company, ultimately positioning us for long-term success."
In the company's slide presentation, Del Grosso singled out five "critical" upcoming launches: the Mustang Mach-E, the Nissan Rogue, the Citroen C41, the Mercedes S-Class and the Ford F-150. The F-150 launch includes a flat work surface interior feature along with the "max recline" sleeper seat.
"We're not here to declare a victory today," Del Grosso said in a conference call. "We have a lot of work ahead of us to achieve that, but we are well on our way."
Adient's shares on Thursday dropped 14.4 percent to close at $15.66 on Thursday.
Adient, of Plymouth, Mich., ranks No. 12 on the Automotive News list of the top 100 global suppliers, with worldwide parts sales to automakers of $16.53 billion in 2019.
Tenneco, of Lake Forest, Ill., ranks No. 23 on that list, with worldwide parts sales to automakers of $11 billion in 2019.
