Standard Motor Q2 Earnings & Rev Miss - Analyst Blog

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Standard Motor Product Inc. ( SMP ) reported an 18.6% rise in adjusted earnings per share to 70 cents in the second quarter of 2013 from 59 cents in the year-ago quarter. However, earnings per share missed the Zacks Consensus Estimate of 76 cents. Profits went up 20.6% to $16.4 million from $13.6 million in the year-ago quarter.

Total revenue increased 0.5% to $270.1 million, missing the Zacks Consensus Estimate of $283 million. The marginal rise in revenues was attributable to decrease in revenues from Temperature Control segment, partially offset by better performance in the Engine Management segment.

Gross profit improved 12.2% to $77.8 million or 28.8% of sales from $69.3 million or 25.8% of sales in the second quarter of 2012, driven by expansion of the low-cost manufacturing operations together with benefits from recent acquisitions.

Operating income increased 19.7% to $27.2 million from $22.7 million in the second quarter of 2012. Operating margin improved to 10.1% from 8.4% in the year-ago quarter.

Segment Results

Revenues from the Engine Management segment rose 5.4% to $182.1 million. Operating profit grew 38.1% to $24.8 million from $17.9 million in the corresponding quarter last year.

Revenues from the Temperature Control segment declined 6.9% to $86.7 million due to unfavorable weather impacts. The company recorded an operating income of $6.9 million compared with $7.7 million in the second quarter of 2012. Revenues from all other segment declined 55.7% to $1.4 million from $3.2 million year ago.

Financial Position

Standard Motors had cash balance of $12.3 million as of Jun 30, 2013, compared with $13.1 million on Dec 31, 2012. Long-term debt of the company was $133,000 as of Jun 30, 2013, down from $195,000 as of Dec 31, 2012.

In the second quarter of fiscal 2013, the company had cash outflow of $12.4 million from operating activities compared with cash inflow of $21.2 million in the year-ago period. Capital expenditures increased to $5.5 million from $5.3 million a year ago.

Our Take

Standard Motor, based in Long Island City, N.Y, is one of the leading manufacturers, distributors and marketers of automotive replacement parts in the U.S. Further, it enjoys strong brand recognition globally and a less cyclical end-market within the auto and auto parts industry.

However, we are concerned about the company's high dependence on its customers including Advance Auto Parts Inc. ( AAP ) for its business. The company retains a Zacks Rank #1 (Strong Buy).

Some other stocks that are performing well in the industry where Standard Motor operates include Motorcar Parts of America Inc. ( MPAA ) and LKQ Corp. ( LKQ ), both are Zacks Rank #2 (Buy) stocks.



ADVANCE AUTO PT (AAP): Free Stock Analysis Report

LKQ CORP (LKQ): Free Stock Analysis Report

MOTORCAR PARTS (MPAA): Free Stock Analysis Report

STANDARD MOTOR (SMP): Free Stock Analysis Report

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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.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: AAP , LKQ , MPAA , SMP

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