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Standard Motor (SMP) Q2 Earnings & Sales Beat Estimates

Zacks Equity Research
·4 mins read

Standard Motor SMP reported adjusted earnings of 52 cents per share in second-quarter 2020, beating the Zacks Consensus Estimate of 22 cents. However, the bottom line came in lower than the prior-year quarter’s 92 cents per share. Dismal performance of both its major segments — Engine Management and Temperature Control — resulted in this year-over-year decline.

Second-quarter earnings from continuing operations were $11.8 million compared with the $21 million recorded in the prior-year quarter. Total revenues decreased to $248 million, beating the Zacks Consensus Estimate of $227 million. The revenue figure, however, came in lower than the year-ago number of $305 million.

Gross profit decreased to $64.3 million from the year-ago quarter’s $88.9 million. Operating income slid to $16 million from the $27.7 million recorded in the prior-year quarter.

Standard Motor Products, Inc. Price, Consensus and EPS Surprise

Standard Motor Products, Inc. Price, Consensus and EPS Surprise
Standard Motor Products, Inc. Price, Consensus and EPS Surprise

Standard Motor Products, Inc. price-consensus-eps-surprise-chart | Standard Motor Products, Inc. Quote

Segmental Results

During the June-end quarter, revenues from the Engine Management segment fell 20.6% year on year to $173.1 million. Operating income was $16.7 million compared with the prior-year quarter’s $26.3 million.

Revenues in the Temperature Control segment decreased 14.2% year over year to $72.4 million. The segment registered an operating income of $3.97 million compared with the $7.15 million recorded in second-quarter 2019.

Revenues in the All Other segment decreased to $2.39 million from the $2.72 million recorded in the prior-year quarter. The segment reported an operating loss of $4.67 million, wider than the loss of $5.13 million posted in corresponding quarter of 2019.

Financial Position 

Standard Motor had cash and cash equivalents of $22.5 million as of Jun 30, 2020, compared with $10.4 million as of Dec 31, 2019. Long-term debt was $108,000 compared with $129,000 recorded as of Dec 31, 2019. Net cash used in operating activities totaled $885,000 during the first half of 2020. Capex during the quarter amounted to $9.03 million, up from the $7.58 million recorded in the first six months of 2020.

In a bid to boost financial flexibility amid the pandemic-related uncertainties, Standard Motor has suspended its quarterly payouts and stock-buyback programs.

Zacks Rank & Other Stocks to Consider

Currently, Standard Motor carries a Zacks Rank #1 (Strong Buy).

Other top-ranked stocks in the auto sector include AutoNation AN, Geely Automobile Holdings Ltd. GELYY and LCI Industries LCII. While AutoNation sports a Zacks Rank of 1, Geely Automobile and LCI Industries carry a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of AutoNation have rallied 8.8%, year to date, compared with the industry’s gain of 5.1%.

Shares of Geely Automobile have climbed 10.3%, year to date, as against the industry’s decline of 15.7%.

Shares of LCI Industries have appreciated 22.1%, year to date, as against the industry’s decline of 8.3%.

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