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Standard Motor (SMP) Q1 Earnings and Revenue Beat Estimates

Share price of Standard Motor Products Inc.SMP rose 3.4% to $52.67 on May 3, as the company surpassed earnings and revenue estimates.

Adjusted earnings of 74 cents per share beat the Zacks Consensus Estimate of 65 cents, an increase from 55 cents earned in the prior-year quarter. Adjusted earnings from continuing operations increased to $17.1 million from $12.6 million in the year-ago quarter.

Earnings from continuing operations, on a reported basis, amounted to $16.4 million or 70 cents per share, rising from $12.7 million or 55 cents in the prior-year quarter.

Total revenue also rose to $282.4 million from $238.9 million a year ago surpassing the Zacks Consensus Estimate of $264 million.

Gross profit in the first quarter of 2017 increased to $84.1 million from the year-ago quarter figure of $73 million. Adjusted operating income excluding restructuring and integration expenses improved to $26.7 million from $20 million in the year-ago quarter.

Standard Motor Products, Inc. Price, Consensus and EPS Surprise

Standard Motor Products, Inc. Price, Consensus and EPS Surprise | Standard Motor Products, Inc. Quote

Segment Results

Revenues at the Engine Management segment rose to $211.3 million in the reported quarter from $180.6 million a year ago. Operating profit was $28.1 million (13.3% of sales) compared with $24.2 million (13.4% of sales) in the prior-year quarter.

Revenues at the Temperature Control segment increased to $70.3 million from $56.7 million a year ago. The segment recorded an operating profit of $4.7 million (6.7% of sales) compared with a profit of $2.4 million (4.2% of sales) in the first quarter of 2016.

Revenues at the All Other segment decreased to $774 million from $1.5 million a year ago. The segment recorded an operating loss of $6.04 million, narrower than $6.6 million in the first quarter of 2016.

Financial Position

Standard Motor had cash balance of $15.6 million as of Mar 31, 2017, compared with $13.4 million as of Mar 31, 2016. Total debt of the company was $111,000 as of Mar 31, 2017, compared with $158,000 as of Mar 31, 2016.

In the first quarter of 2017, Standard Motor used $26.8 million cash for operating activities compared with $1.3 million used in the prior-year period. Capital expenditures were $3.2 million, down from the year-ago level of $4.1 million.

Business Update

Apart from General Cable integration, the company will be relocating the balance of its Grapevine, TX operation to Reynosa, Mexico which is expected to be completed by the end of the year. Standard Motor also plans to shift its electronics plant in Orlando, FL, to an existing facility in Independence, KS to be complete by mid-2018. These actions are expected to lead to significant additional savings.

Dividend

Standard Motor's board approved a dividend of 19 cents per share to be paid on Jun 1 to stockholders of record on May 15.

Price Performance

Standard Motor has outperformed the Zacks categorized Auto/Truck Replacement Parts industry in the last six months. During this period, the company's share rallied 5.1%, while the industry witnessed a 5% increase.

Zacks Rank & Key Picks

Standard Motor currently carries a Zacks Rank #2 (Buy).

Other well-ranked companies in the auto space include Allison Transmission Holdings, Inc. ALSN , Cummins Inc. CMI and CNH Industrial N.V. CNHI .

Allison Transmission Holdings has an expected long-term growth of 11% and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Cummins has an expected long-term growth of 9.8% and flaunts a Zacks Rank #1.

CNH Industrial has an expected long-term growth of 20% and carries a Zacks Rank #2.

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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 Nasdaq, Inc.


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

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