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Standard Motor (SMP) Q4 Earnings Surpass Estimates, Up Y/Y

Zacks Equity Research
·4 mins read

Standard Motor Products Inc. SMP reported adjusted earnings of 59 cents per share in fourth-quarter 2019, beating the Zacks Consensus Estimate of 57 cents. Further, the bottom line comes in higher than the prior-year quarter’s 52 cents per share. The company delivered better-than-expected results on stellar revenues from the Engine Management and All Other segments.

During the fourth quarter, earnings from continuing operations were $13.6 million compared with the $11.8 million recorded in the prior-year quarter. During the reported quarter, total revenues decreased to $241.3 million, missing the Zacks Consensus Estimate of $243 million. The reported tally also comes in lower than the year-ago figure of $247 million.

Gross profit increased to $72.84 million from the year-ago quarter’s $71.6 million. Operating income slid to $17.5 million from the $18.43 million recorded in the year-ago 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 December-end quarter, revenues from the Engine Management segment edged down 0.5% year on year to $201.9 million. However, the reported figure surpassed the Zacks Consensus Estimate of $198 million. Operating income was $27.38 million compared with the $23.92 million registered in the prior-year quarter. The segment benefited from the completion of the integration of wire operations in Mexico and the company’s cost-containment efforts.

Revenues in the Temperature Control segment decreased 12.1% year over year to $36.72 million. The revenue figure also missed the Zacks Consensus Estimate of $42.20 million. The segment posted an operating loss of $3.01 million, narrower than the operating loss of $3.49 million reported in fourth-quarter 2018.

Revenues in the All Other segment rose to $2.57 million from the $2.19 million recorded in the prior year. Also, the top-line figure surpassed the Zacks Consensus Estimate of $2.55 million. The segment reported an operating loss of $5.76 million, wider than the loss of $4.56 million posted in fourth-quarter 2018.

Financial Position

Standard Motor had cash and cash equivalents of $10.37 million as of Dec 31, 2019, compared with $11.14 million as of Dec 31, 2018. Other long-term debt was $129,000 as of Dec 31, 2019, compared with $153,000 as of Dec 31, 2018.

Dividend Update

The company’s board of directors has approved a quarterly dividend of 23-25 cents per common share. This dividend will be paid out on Mar 2, to shareholders as of Feb 14, 2020.

Zacks Rank & Stocks to Consider

Standard Motor currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the Auto-Tires-Trucks sector include BRP Inc. DOOO, Fox Factory Holding Corp. FOXF and SPX Corporation SPXC, each carrying a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

BRP has a projected earnings growth rate of 20.17% for 2020. Its shares have surged 73.3% over the past year.

Fox Factory has an estimated earnings growth rate of 9.67% for the ongoing year. The company’s shares have appreciated 16.1% in a year’s time.

SPX has an expected earnings growth rate of 6.52% for the current year. The stock has rallied 36.7% in the past year.

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