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Standard Motor (SMP) Shares Barely Move Since Q1 Earnings Beat

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Standard Motor Products Inc. SMP shares have hardly moved since it unveiled results on May 3. The company reported first-quarter 2022 adjusted earnings of 92 cents per share, beating the Zacks Consensus Estimate of 81 cents. However, the bottom line declined from the prior-year quarter’s 97 cents.

Total revenues rose 16.6% year over year to $323 million, surpassing the Zacks Consensus Estimate of $311 million. Gross profit rose to $89.8 million from the year-ago quarter’s $83.8 million. Operating income declined 8.2% to $26.9 million, owing to an escalation in SG&A expenses, which flared up 15.5% year over year. SMP expects its consolidated gross margin in the band of 28-29% for 2022.

The board approved a dividend of 27 cents per share, payable on Jun 1, 2022, to stockholders of record on May 16, 2022. The company repurchased common shares worth $6.9 million during the quarter under review, with $22.8 million remaining under the current buyback authorization.

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 reported quarter, revenues from the Engine Management segment totaled $239.3 million, up 13% year over year. The upside was driven by a combination of strong demand, continued success from customer initiatives, new business wins, the positive impact of recent acquisitions and the benefit of price increases implemented in the quarter. The operating income was $26.7 million compared with the prior-year quarter’s $31.1 million.

Revenues from the Temperature Control segment rose 30% year over year to $81.3 million, led by strong pre-season orders, and new business wins in winter-related categories. The segment registered an operating income of $5.2 million, rising from $3.6 million.

Revenues from the All Other segment came in at $2.2 million, rising from $2 million in the prior-year period. The segment reported an operating loss of $5 million, narrower than a loss of $5.4 million incurred in the corresponding quarter of 2021.

Financial Position

Standard Motor had $19.9 million in cash as of Mar 31, 2022, compared with $21.8 million as of Dec 31, 2021. Net cash used in operating activities totaled $103.9 million for the first quarter of 2022, compared with $11.4 million used in the corresponding period last year.

Currently, SMP has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Peer Releases

Meritor, Inc. MTOR: Meritor posted its second-quarter fiscal 2022 results on May 3. It reported adjusted earnings per share of 98 cents, which increased 44.12% from 68 cents in the year-ago quarter. The metric marginally beat the Zacks Consensus Estimate of 96 cents. Sales grew 17.4% year over year to $1,154 million in the fiscal second quarter. The top line also beat the Zacks Consensus Estimate of $1,074.9 million.

MTOR’s cash and cash equivalents were $115 million as of Mar 31, 2022, rising from $101 million as of Sep 30, 2021. Long-term debt was $1,025 million at the end of the quarter, up from $1,008 million reported on Sep 30, 2021. During the fiscal second quarter, Meritor’s cash used for operating activities was $17 million against $63 million of cash provided by operating activities in the year-ago quarter.

Lear Corporation LEA: Lear reported first-quarter 2022 results on May 3. It posted adjusted earnings of $1.80 per share, plunging around 51.7% year over year. The bottom line, however, surpassed the Zacks Consensus Estimate of $1.56 per share. Revenues declined around 2.7% year over year to $5,208.4 million. The top line beat the Zacks Consensus Estimate of $4,957.8 million.

Lear had $1,162 million of cash and cash equivalents at quarter-end, compared with $1,318.3 million recorded at the end of 2021. It had long-term debt of $2,595.8 in the quarter, almost flat with the 2021-end level. Net cash used in operating activities totaled around $221 million, down from $247.5 million a year ago. LEA generated FCF of $90.4 million, declining from $134.6 million in the previous-year quarter.

BorgWarner, Inc. BWA: BorgWarner posted first-quarter 2022 results on May 4. It reported adjusted earnings of $1.05 per share, declining from $1.21 recorded in the prior-year quarter. The bottom line, however, beat the Zacks Consensus Estimate of 80 cents per share. The automotive equipment supplier reported net sales of $3,874 million, outpacing the Zacks Consensus Estimate of $3,639.8 million. The top line, however, declined 3.4% year over year.

As of Mar 31, 2022, BorgWarner had $1,501 million in cash equivalents compared with $1,841 million on Dec 31, 2021. Long-term debt was $4,223 million, down from $4,261 million recorded on Dec 31, 2021. Net cash provided by operating activities was $116 million in the quarter under review. BWA’s first-quarter 2022 capex and negative FCF totaled $177 million and $61 million, respectively.


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