Standard Motor Products Inc.
) reported a 26.2% rise in adjusted earnings per share to 53
cents in the first quarter of 2014 from 42 cents in the year-ago
quarter. Also, the number surpassed the Zacks Consensus Estimate
of 47 cents. Profits went up 27.9% to $12.4 million from $9.7
million in the year-ago quarter.
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Including non-operational gains and losses, earnings on a
reported basis amounted to $12.4 million or 53 cents per share,
compared with $9.6 million or 41 cents in the prior-year quarter.
The year-over-year improvement in earnings was driven by an
increase in gross margin and decrease in Selling General &
Total revenue increased 0.9% to $232.8 million, missing the Zacks
Consensus Estimate of $235 million.
Gross profit improved 3.2% to 67.9 million or 29.2% of sales from
$65.8 million or 28.5% of sales in the first quarter of 2013. The
upside was driven by benefits from the shifting of production to
low-cost areas, increased manufacturing, and savings in
purchasing and successful integration of the acquisitions.
Operating income increased 27.3% to $20.4 million from $16.0
million in the first quarter of 2013.
Revenues from the Engine Management segment climbed 2.2% to
$179.3 million. The figure declined sequentially as some of the
customers shifted their pipeline orders in the fourth quarter.
Operating profit rose 16% to $24.5 million or 13.7% of sales from
$21.2 million or 12.1% in the corresponding quarter last year.
Revenues from the Temperature Control segment declined 2.4% to
$51.5 million. The segment recorded an operating income of
$613,000 compared with a loss of $373,000 in the first quarter of
Revenues from the All Other segment decreased to $2 million from
$2.5 million a year ago. The segment recorded an operating loss
of $4.8 million against $4.6 million in the first quarter of
Standard Motor had cash balance of $4.4 million as of Mar 31,
2014, compared with $5.6 million on Dec 31, 2013. Long-term debt
of the company stood at $43,000 as of Mar 31, 2014, down from
$75,000 as of Dec 31, 2013.
In the first three months of fiscal 2014, the company had cash
flow of $9.2 million from operating activities versus $26.8
million in the year-ago period. Capital expenditures rose to $2.8
million from $2.6 million a year ago.
Standard Motor announced a quarterly dividend of 13 cents per
share. The dividend is payable on Jun 2, 2014, to shareholders of
record as of May 15, 2014.
On Apr 21, Standard Motor made an investment of $14 million in a
50/50 joint venture with Gwo Yng Enterprises, a China-based
manufacturer of air conditioning accumulators, filter driers,
hose assemblies, and switches. This investment will provide the
company with a low-cost source of high quality temperature
control products. In addition, it will help the company enhance
its presence in the rapidly growing China market.
On the same day, Standard Motor also acquired certain assets and
liabilities of Annex Manufacturing, which is a distributor of a
wide range of temperature control products, for $11.5 million.
Annex's sales in 2013 were $22 million, and Standard Motor's
Temperature Control division accounted for roughly 40% of the
volume. After restructuring, the Annex operations will be
transferred to the Lewisville, TX facility.
The company also announced earlier that it will acquire certain
assets and liabilities of Pensacola Fuel Injection, a
remanufacturer of diesel fuel. The company is relocating this
operation to its Grapevine, TX facility.
Standard Motor, based in Long Island City, New York, is one of
the leading manufacturers, distributors and marketers of
automotive replacement parts in the U.S. Standard Motor currently
retains a Zacks Rank #3 (Hold).
Other better-ranked stocks worth considering include
Douglas Dynamics, Inc.
Remy International, Inc.
Dorman Products, Inc.
). While Douglas sports a Zacks Rank #1 (Strong Buy), Dorman and
Remy carry a Zacks Rank #2 (Buy).