Standard Motor Products Inc. (SMP): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
Standard Motor reported a 50% increase in adjusted earnings per share to $0.42 in the fourth quarter of 2013, surpassing the Zacks Consensus Estimate of $0.33. Total revenue increased 13.7% to $218.7 million, beating the Zacks Consensus Estimate of $193 million. The improvement was due to rising demand from the Engine Management customers, who are expanding the product lines of their commercial businesses. Strong brand recognition and benefits from recent acquisitions will continue to drive revenues. However, we are concerned about Standard Motor's high dependence on few customers and price competition. Thus, we are maintaining our Neutral recommendation.

Overview:

Long Island City, New York-based Standard Motor Products Inc. (SMP) was founded in 1919 and is one of the leading manufacturers, distributors and marketers of automotive replacement parts in the U.S. Presently, the company has three primary operating segments ? Engine Management (accounted for 72.3% of the company's sales in 2013), Temperature Control (26.7%) and All Other (1%).

The Engine Management division manufactures ignition and emission parts, ignition wires, battery cables, fuel system parts and sensors for vehicles. The Temperature Control division manufactures and remanufactures air conditioning and heating parts, engine cooling system parts, power window accessories, and windshield washer system parts.

Standard Motor sells its products primarily to warehouse distributors like CARQUEST and NAPA Auto Parts, large retail chains such as Advance Auto Parts, AutoZone, CSK Auto, O'Reilly Automotive, and Pep Boys, and original equipment manufacturers (OEMs). The products are sold in the U.S., Canada, Europe, Latin America and Asia.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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