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Tenneco Indicates 1998 Wall Street Forecasts on Target

10 December 1997

Tenneco Indicates 1998 Wall Street Forecasts on Target; Fourth Quarter 1997 Earnings Will Be Below Current Forecasts

    GREENWICH, Conn., Dec. 10 -- Tenneco Chairman and Chief
Executive Officer Dana G. Mead said today that he expects earnings for 1998 to
be in line with Wall Street estimates of $3.00 to $3.35; also, revenues from
continuing operations in 1997 are expected to be up approximately 10 percent,
with earnings per share from continuing operations up approximately
25 percent.*
    Earnings per share from continuing operations for the fourth quarter
ending December 31 are expected to be approximately 40 to 45 cents, compared
with the current consensus forecast of 62 cents, and last year's fourth
quarter results of 18 cents from continuing operations before restructuring
charges.
    Consequently, the increase in earnings per share for the full-year 1997 is
expected to be below the current consensus forecast for the year.  Mead said a
combination of factors is expected to hold earnings below anticipated levels
in the current quarter.
    These factors include a seasonally weaker-than-normal North American
aftermarket for automotive parts; the timing of recent corrugated pricing
improvements, where the full impact will not be realized until the first
quarter of 1998; currency translation of non-U.S. earnings related to the
continuing strong dollar, which has been factored into Tenneco's 1998
projections; and, non-recurring charges related to administrative programs,
systems start-up costs, a prior asset sale, a plant rationalization and a
customer bankruptcy, many of which will result in lower costs in 1998.
    "At this point, we have taken actions to manage the effect of these
items," Mead said.
    He emphasized that, under currently anticipated business conditions for
1998, the company expects to achieve substantial earnings growth next year.
"We remain very positive about continued improvement in Tenneco's business
results during the upcoming year," he said.
    Automotive's outlook is strong, he said.  "We are supplying product for a
record number of new vehicle models, including 18 in the United States and 26
in Europe," he said.  "New, premium-priced replacement parts for consumers,
including the Quiet-Flow muffler and the new Sensa-Trac struts and shock
absorbers with innovative Safe-Tech technology, also will be available in the
first quarter, bolstering margins and earnings."
    Paperboard and box price increases will continue to improve earnings, he
said.  Further substantial growth in Specialty Packaging is projected and
several new product introductions are planned, which should improve margins.
    Also, further improvement is expected in reducing costs in both Automotive
and Packaging next year.  Those savings should approximate the $40 million in
cost reductions achieved in each of those businesses in 1997.
    Tenneco is a $7 billion global manufacturing company with headquarters in
Greenwich, Conn., and 50,000 employees worldwide.  Tenneco Automotive is one
of the world's largest producers and marketers of ride control products and
exhaust systems, which are sold under the Monroe(R) and Walker(R) brand names.
Among its products are Sensa-Trac(R) and Rancho(R) shock absorbers, Walker
Quiet-Flow(R) mufflers and DynoMax(R) performance mufflers, and Monroe Clevite
vibration control components.  Tenneco Packaging is among the world's leading
and most diversified packaging companies.  Among its products are Hefty(R)
trash bags, Hefty OneZip(R) and Baggies(R) food storage bags and E-Z Foil(R)
single-use aluminum cookware.
    Statements in this press release regarding (a) the company's earnings
expectations for the fourth quarter of 1997 and for the years 1997 and 1998
and (b) related matters, including the company's expected cost reductions, are
forward looking and are identified by the use of the following forward-looking
words and phrases:  "believe," "remain very positive about continued
improvement," "expects," "expected," "likely," "projections," "projected,"
"outlook," "will be available," "will result," "implemented... first quarter
of 1998," "planned," "anticipated," and "should approximate."  These
forward-looking statements are based on the company's current expectations.
Because forward-looking statements involve risks and uncertainties, the
company's actual results could differ materially.  Among the factors that
could cause results to differ materially from current expectations are: (i)
the general political, economic and competitive conditions in markets and
countries where the company and its subsidiaries operate, including the effect
of currency translation adjustments; (ii) changes in capital availability or
costs; (iii) decreases in demand for company products and the resulting
negative impact on the company's revenues and margins from such products; (iv)
the cost of compliance with changes in regulations, including environmental
regulations; (v) employee workforce factors; (vi) increases in the costs of
the company's raw materials, including the cost of resin, and the timing of,
and ability to implement, price increases to pass along such increases in
costs; (vii) the company's ability to integrate the operations of acquired
businesses quickly and in a cost-effective manner; (viii) the company's
ability to manage in future months the impact of the items listed above as
contributors to the lower-than-expected rate of earnings growth in the fourth
quarter; and (ix) the time and occurrence (or non-occurrence) of transactions
and events, which may be subject to circumstances beyond the company's
control.

    * For a full audio replay of Mr. Mead's remarks, please call 888-566-0609
until 5 p.m. Dec. 12.

SOURCE  Tenneco