Standard Motor Products, Inc. (NYSE:SMP) Q4 2023 Earnings Call Transcript
Standard Motor Products, Inc. (NYSE:SMP) Q4 2023 Earnings Call Transcript February 22, 2024
Standard Motor Products, Inc. misses on earnings expectations. Reported EPS is $0.37 EPS, expectations were $0.62. SMP isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good day, everyone, and welcome to today's Standard Motor Products Fourth Quarter 2023 earnings conference call. At this time all participants are in a listen only mode. Later you will have the opportunity to ask questions during the question-and-answer session. [Operator Instructions] Also today's call is being recorded, and I will be standing by if anyone should need any assist. Now at this time I will turn things over to Mr. Tony Cristello Vice President Investor Relations. Please go ahead, sir.
Tony Cristello: Thank you, and good morning, everyone, and we appreciate you joining us for our Standard Motor Products Fourth Quarter 2023 earnings conference call. With me today are Larry Sills, Chairman, Emeritus, Eric Sills, President and CEO, Jim Burke, Chief Operating Officer and Nathan Iles, Chief Financial Officer. On our call today, Eric will give an overview of our performance in the quarter. Jim will provide update on our Shawnee DC and Nathan will discuss our financial results and our annual guidance. Eric will then provide some concluding remarks and we'll open up the call for Q&A. Before we begin this morning, I'd like to remind you that some of the material that we'll be discussing today may include forward-looking statements regarding our business and expected financial results.
When we use words like anticipate, believe, estimate or expect, these are generally forward-looking statements. Although we believe that the expectations reflected in these forward-looking statements are reasonable, they are based on information currently available to us and certain assumptions made by us, and we cannot assure you that they will prove correct. You should also read our filings with the Securities and Exchange Commission for a discussion of the risks and uncertainties that could cause our actual results to differ from our forward-looking statements. I'll now turn the call over to Eric Sills, our CEO.
Eric Sills: Thank you, Tony and good morning, everyone. And welcome to our fourth quarter earnings call. I'd like to open by thanking all of the SMP employees globally, whose tireless commitment to SMP makes us who we are. Fourth quarter capital was a fairly challenging year for SMP. As noted in our release, we saw some different trajectories for our aftermarket business versus our Engineered Solutions business with nuances throughout. So let me get into it by segment starting with vehicle control. Entering the fourth quarter roughly flat to 2022's record year, vehicle control demand softened as the fourth quarter progressed and we finished the year down 1.7%. As previously discussed, we were impacted throughout the year by two largely non-recurring events.
First off, we continued to see the impact of the previously announced customer bankruptcy. And to a lesser extent we saw less pipeline activity from some of our larger customers throughout the year. But beyond that, we saw general softness in the market in the fourth quarter as evidenced by our customer POS results, which declined as the quarter progressed. That said, we believe this is largely a temporary in nature as marketplace dynamics remain strong and we have seen a modest resurgence as 2024 gets underway. Next I'll discuss our Temperature Control business. As you know since the majority of the business is tied to air conditioning, it's subjected to more weather-related influences than the other parts of our business. Not only is it seasonal in nature, the timing of weather patterns throughout the year can impact the market.
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