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TENNECO REPORTS MAJOR IMPROVEMENT IN SECOND QUARTER RESULTS:

 TENNECO REPORTS MAJOR IMPROVEMENT IN SECOND QUARTER RESULTS:
 -- Earnings per share total $1.23 vs. loss of 15 cents last year.
 -- Earnings include 71 cents from continuing operations and 52 cents from discontinued operations.
 -- J I Case earns $11 million, its first profit in six quarters.
 -- All divisions report improved earnings; packaging and chemicals units more than double 1991 second quarter income.
 -- Outlook for balance of 1992 is positive, despite impact of additional production cuts announced at J I Case.
 HOUSTON, July 28 /PRNewswire/ -- Tenneco Inc. today announced earnings per common share for the second quarter were $1.23 compared with a net loss of 15 cents in the second quarter of 1991. This was made up of 71 cents from continuing operations and 52 cents from discontinued operations -- primarily the gain from the sale of the company's minerals operations.
 Revenues were unchanged at $3.4 billion.
 Operating income (pre-interest, pre-tax) totaled $296 million, compared with $108 million in the second quarter of 1991.
 Net income of $178 million, including $105 million from continuing operations and $73 million from discontinued operations, compared with a net loss of $14 million for the 1991 second quarter.
 J I Case reported an operating profit of $11 million, up from a loss of $123 million in last year's second quarter, its first profit in six quarters.
 "This major income turnaround on flat revenues reflects the kind of earnings leverage being generated by our focus on cost and quality. Our emphasis on accountability is clearly working. Our objective continues to be consistently improved profitability for Tenneco," said Mike Walsh, Tenneco chairman and chief executive officer.
 All Tenneco divisions reported improved operating income for the second quarter:
 -- At $59 million, Packaging Corporation of America (PCA) was up 136 percent over last year's $25 million.
 -- Albright & Wilson, at $19 million, was up 171 percent over last year's $7 million.
 -- J I Case posted $11 million of operating income, a $134 million swing over the $123 million loss in last year's second quarter.
 -- Tenneco Gas, at $73 million, was up 9 percent from last year.
 -- Tenneco Automotive, at $73 million, was up 11 percent from the second quarter a year ago.
 -- Newport News, at $67 million was up $1 million over the 1991 second quarter.
 J I CASE RESULTS
 The $134 million positive swing in Case's operating earnings was achieved despite a 10 percent drop in sales revenues compared with the second quarter of last year. Case cut its operating expenses by $45 million compared with the second quarter last year. This is in addition to a $36 million reduction in operating expenses in the first quarter of this year.
 YEAR-TO-DATE RESULTS
 For Tenneco as a whole, operating income for the first six months was $503 million, an increase of 143 percent over the first half of last year. Net income for the first half of 1992 totaled $211 million, or $1.43 per common share, compared with a loss of $13 million, or 18 cents per common share for the same period last year. This was made up of 93 cents a share from continuing operations and 50 cents a share from discontinued operations. Revenues were $6.6 billion compared with $6.7 billion at the midpoint of 1991.
 For the first six months, all Tenneco companies reported increases over the first half of 1991. First half operating earnings exceeded last year's total operating earnings at both Albright & Wilson and PCA, excluding the 1991 gains on asset sales.
 Walsh also said that Tenneco had "virtually completed" its $3 billion restructuring plan and, as a result, the company's industrial debt ratio was improved from 59 percent at the end of 1991 to 57.7 percent at the end of the second quarter. During the fourth quarter of last year, the company reduced its industrial debt ratio from 69 to 59 percent.
 OUTLOOK FOR THE BALANCE OF THE YEAR
 Walsh indicated the outlook for the rest of the year was for continued, favorable comparisons with last year. He said he expected a "significant increase" over last year at both Tenneco Gas and Tenneco Automotive; that Newport News Shipbuilding results should be "comfortably better" than last year; and that management would look to both PCA and Albright & Wilson to continue the major improvements demonstrated in the first six months.
 Walsh also indicated that third and fourth quarter comparisons at Case would be positive, however he said that additional production cuts at Case would put third quarter earnings at Case "under severe pressure" and the production costs, combined with Case's first quarter loss of $77 million, would put Case into a loss position for the year.
 DIVISIONAL ANALYSIS
 Natural Gas Pipelines
 Tenneco Gas reported improved operating income of $73 million for the second quarter, up 9 percent, compared with $67 million in the 1991 period. Last year's second quarter results included $13 million of income from non-recurring items.
 Operating income increased because of higher rates on the Tennessee Gas Pipeline, the near full capacity operation of the Kern River Gas Transmission system and improved efficiencies and cost controls. Pipeline deliveries were up despite the lingering effects of the warmer- than-normal heating season.
 Year-to-date the pipeline has generated $191 million in operating income, compared with $180 million during the first half of 1991.
 Farm and Construction Equipment
 J I Case reported second quarter operating income of $11 million compared with an operating loss of $123 million for the same period last year. Year-to-date Case reported a loss of $66 million, compared with a loss of $270 million for the first six months of 1991.
 Case's profit came despite lower sales revenues compared with the same quarter a year ago. The profit was the result of increased price realization and improved cost control.
 Aggressive production cuts already announced at Case have not been sufficient to keep up with a year-over-year drop in demand of approximately 20 percent in both the construction and agricultural equipment markets. As a result, and in order to keep inventories in line, production will be cut by an additional 9 percent. These added cuts, when combined with earlier cuts, will result in 1992 production approximately 20 percent below 1991 levels.
 Tenneco Automotive
 Tenneco Automotive reported increased operating income of $73 million in the second quarter compared with $66 million, a rise of 11 percent over the same quarter last year. Revenues of $509 million were up 5 percent from last year.
 The improved results were driven by aggressive cost management, combined with an increase in original equipment sales. Original equipment sales rose 18 percent in the quarter mostly due to strong sales of exhaust products in North America. Aftermarket sales for both exhaust and ride control products were down slightly.
 Operating income for the first six months totaled $116 million, up 7 percent. Revenues were $966 million, a 10 percent increase over the same period last year.
 Shipbuilding
 Newport News Shipbuilding reported second quarter operating income of $67 million, slightly higher than last year's performance for the same period. Revenues of $589 million were $13 million higher than the second quarter of 1991. The current backlog of $5.6 billion includes eight Los Angeles class submarines, two Nimitz class aircraft carriers and the refueling and overhaul of the USS Enterprise.
 The shipyard recorded $120 million of operating income for the first six months of 1992, compared with $115 million in the same period a year ago. Year-to-date revenues of $1.2 billion were $61 million higher than the same period last year.
 Newport News won six commercial ship repair contracts during the first half of 1992 and received a large number of requests for bids on commercial work. As it diversifies its product base, the company continues to improve its competitive position through cost cutting measures, including the elimination of about 2,000 jobs since the beginning of 1992.
 Packaging
 Packaging Corporation of America reported a 136 percent increase in second quarter operating income -- $59 million compared with $25 million in the comparable period last year. Revenues increased by 7 percent to $517 million.
 The improved earnings were driven by a major increase in income from containerboard due to higher volumes and margins. The higher margins are a result of company-wide quality, productivity and cost reduction programs begun in 1991 and intensified this year. Earnings from specialty products also were very strong.
 Year-to-date operating income at PCA totaled $108 million, an increase of 104 percent compared with $53 million during the first half of last year. Revenues for the first six months were $1 billion, up 10 percent, due to higher corrugated container sales volumes, which continued to exceed industry levels, and strength in the specialty businesses, particularly plastics packaging.
 Chemicals
 Albright & Wilson almost tripled its operating income with $19 million from continuing businesses compared with $7 million for the same period a year ago. Operating income for both periods excludes pulp chemicals, which has been reflected as a discontinued operation. Second quarter revenues of $247 million were $23 million higher than those in the same quarter last year. The improved income was mainly due to the company's cost, quality and restructuring programs, which have yielded substantial cost savings.
 Year-to-date operating income of $34 million compares with $14 million for the same period of 1991. Revenues were $484 million, compared with $471 million for the first half of 1991.
 Tenneco Inc. (NYSE: TGT) is a Houston-based diversified industrial corporation with major business interests in natural gas pipelines, farm and construction equipment, automotive parts, shipbuilding, packaging and chemicals.
 THREE MONTHS ENDED JUNE 30,
 1992 1991
 Net sales and operating
 revenues $ 3,435,000,000 $ 3,444,000,000
 Income before interest
 and taxes $ 296,000,000 $ 108,000,000
 Income (loss) from
 continuing operations $ 105,000,000 $ (17,000,000)
 Income from
 discontinued operations 73,000,000(A) 3,000,000
 Net income (loss) $ 178,000,000 $ (14,000,000)(B)
 Average common shares
 outstanding 142,600,000 122,300,000
 Earnings (loss) per
 average share:
 Continuing operations $ 0.71 $ (0.17)
 Discontinued operations 0.52(A) 0.02
 Total $ 1.23(C) $ (0.15)(B)
 SIX MONTHS ENDED JUNE 30,
 1992 1991
 Net sales and
 operating revenues $ 6,645,000,000 $ 6,714,000,000
 Income before
 interest and taxes $ 503,000,000 $ 207,000,000
 Income(loss)
 from continuing opers. $ 140,000,000 $ (22,000,000)
 Income from
 discontinued
 operations 71,000,000(A) 9,000,000
 Net income (loss) $ 211,000,000 $ (13,000,000)(B)
 Average common
 shares outstanding 142,200,000 122,200,000
 Earnings (loss) per
 average share:
 Continuing oper. $ 0.93 $ (0.25)
 Discontinued oper. 0.50(A) 0.07
 Total $ 1.43(C) $ (0.18)(B)
 (A) Discontinued operations includes a gain on minerals unit sale and a loss on the anticipated sodium chlorate sale.
 (B) The 1991 periods have been restated to reflect the reclassification of income from the minerals and sodium chlorate businesses from continuing operations to discontinued operations.
 (C) Earnings per share include an increase of 20 million common shares outstanding compared with the comparable 1991 periods.
 -0- 7/28/92
 /CONTACT: Christine LeLaurin of Tenneco, 713-757-2761, or home, 713-270-0880/
 (TGT) CO: Tenneco Inc. ST: Texas IN: OIL SU: ERN


KD -- NY042 -- 4046 07/28/92 11:26 EDT
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