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Standard Motor Products (SMP) Down 0.2% Since Last Earnings Report: Can It Rebound?

Zacks Equity Research
Apple (AAPL) closed the most recent trading day at $198.60, moving -0.09% from the previous trading session.

A month has gone by since the last earnings report for Standard Motor Products (SMP). Shares have lost about 0.2% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Standard Motor Products due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Standard Motor Q4 Earnings Miss Estimates, Down Y/Y

Standard Motor reported adjusted earnings of 52 cents per share for fourth-quarter 2018, missing the Zacks Consensus Estimate of 61 cents. Further, the bottom line was lower than the prior-year quarter figure of 54 cents per share.

During the quarter under review, earnings from continuing operations were $12.2 million against loss of $8.1 million in the prior-year quarter.

During the reported quarter, total revenues increased to $247 million from $240 million a year ago. The top line was almost in line with the Zacks Consensus Estimate.

Gross profit increased to $71.6 million from $69.3 million in the year-ago quarter. Operating income also increased to $18.4 million from $15.9 million in the year-ago quarter.

2018 Results

For 2018, earnings were $2.55 per share, down from the 2017 figure of $2.83.

For 2018, revenues were $1.1 billion, almost the same as the 2017 figure.

Segmental Results

During the reported quarter, revenues from the Engine Management segment increased to $203 million from $198 million a year ago.

Operating income was $23.9 million (11.8% of sales) compared with $22.8 million (11.5% of sales) in the prior-year quarter.

Revenues at the Temperature Control segment increased to $41.8 million from $40.3 million a year ago. The segment recorded operating loss of $3.5 million (negative 8.3% of sales) against operating income of $50,000 (0.1% of sales) in the fourth quarter of 2017.

Revenues at the All Other segment increased to $2.2 million from $1.7 million a year ago. The segment registered operating loss of $4.6 million, lower than loss of $5 million recorded in the fourth quarter of 2017.

Financial Position

Standard Motor had cash and cash equivalents of $11.1 million as of Dec 31, 2018, compared with $17.3 million as of Dec 31, 2017. Other long-term debt was $153,000 as of Dec 31, 2018, compared with $79,000 as of Dec 31, 2017.

How Have Estimates Been Moving Since Then?

Fresh estimates followed a downward path over the past two months. The consensus estimate has shifted -20.89% due to these changes.

VGM Scores

At this time, Standard Motor Products has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Standard Motor Products has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.



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