Standard Motor reported a 6.3% drop in adjusted earnings per share
to $0.74 in the third quarter of 2014. Earnings also missed the
Zacks Consensus Estimate of $0.82. Total revenue decreased 2.7% to
$257 million, missing the Zacks Consensus Estimate of $266 million.
Standard Motor is poised to benefit from its joint venture with Gwo
Yng Enterprises, its acquisition of certain assets and liabilities
of Annex Manufacturing and the takeover of Pensacola Fuel
Injection. The company's strong brand recognition and new
initiatives are expected to have favorable impacts, going forward.
However, we are concerned about the company's high dependence on a
few customers and price competition. Thus, we reiterate our Neutral
recommendation on the company.
Long Island City, NY-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 (which accounted for 70% of the company's sales
in the first nine months of 2014), Temperature Control (28.7%) and
All Other (1.3%).
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.
Standard Motor Products Inc. (SMP): Read the Full
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