Standard Motor Products Inc. (SMP) announced the acquisition of all the assets of Pensacola, Fla.-based Pensacola Fuel Injection, barring the retail segment, which will be retained by the current owners of the company. The deal worth $12.2 million is expected to boost Standard Motor’s earnings, excluding one-time integration costs, from the first year itself.
Pensacola Fuel Injection is a privately-held company that remanufactures and distributes diesel injectors, diesel pumps and turbo chargers. Standard Motor used to procure these products from the company earlier.
The acquisition will, therefore, reduce Standard Motor’s raw materials costs while expanding its product portfolio. The company expects the expanded portfolio to be beneficial as the requirement for diesel equipped light vehicles is projected to rise in North America. The growth will likely be fueled by the increasing demand for cars with better fuel mileage.
The automotive replacement parts manufacturing and distributing company reported an 8.2% rise in adjusted earnings per share to 79 cents in the third quarter of 2013 from 73 cents in the year-ago quarter. Earnings per share surpassed the Zacks Consensus Estimate of 76 cents. Profits went up 8.9% to $18.3 million from $16.8 million in the year-ago quarter.
Total revenue declined 4.3% to $264.2 million, missing the Zacks Consensus Estimate of $279 million. The decline was attributable to lower revenues from Temperature Control and All Other segments, partially offset by better performance in the Engine Management segment.
Standard Motor currently carries a Zacks Rank #3 (Hold). Some better-ranked companies in the same industry include Genuine Parts Company (GPC), Motorcar Parts of America Inc. (MPAA) and LKQ Corp. (LKQ). MPAA sports a Zacks Rank #1 (Strong Buy), while GPC and LKQ carry a Zacks Rank #2 (Buy).