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 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.

Overview:

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.



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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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As of 12/19/2014, 04:15 PM


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