Standard Motor (SMP) Q2 Earnings & Sales Beat Estimates

Standard Motor SMP reported adjusted earnings of 52 cents per share in second-quarter 2020, beating the Zacks Consensus Estimate of 22 cents. However, the bottom line came in lower than the prior-year quarter’s 92 cents per share. Dismal performance of both its major segments — Engine Management and Temperature Control — resulted in this year-over-year decline.

Second-quarter earnings from continuing operations were $11.8 million compared with the $21 million recorded in the prior-year quarter. Total revenues decreased to $248 million, beating the Zacks Consensus Estimate of $227 million. The revenue figure, however, came in lower than the year-ago number of $305 million.

Gross profit decreased to $64.3 million from the year-ago quarter’s $88.9 million. Operating income slid to $16 million from the $27.7 million recorded in the prior-year quarter.

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

Standard Motor Products, Inc. price-consensus-eps-surprise-chart | Standard Motor Products, Inc. Quote

Segmental Results

During the June-end quarter, revenues from the Engine Management segment fell 20.6% year on year to $173.1 million. Operating income was $16.7 million compared with the prior-year quarter’s $26.3 million.

Revenues in the Temperature Control segment decreased 14.2% year over year to $72.4 million. The segment registered an operating income of $3.97 million compared with the $7.15 million recorded in second-quarter 2019.

Revenues in the All Other segment decreased to $2.39 million from the $2.72 million recorded in the prior-year quarter. The segment reported an operating loss of $4.67 million, wider than the loss of $5.13 million posted in corresponding quarter of 2019.

Financial Position 

Standard Motor had cash and cash equivalents of $22.5 million as of Jun 30, 2020, compared with $10.4 million as of Dec 31, 2019. Long-term debt was $108,000 compared with $129,000 recorded as of Dec 31, 2019. Net cash used in operating activities totaled $885,000 during the first half of 2020. Capex during the quarter amounted to $9.03 million, up from the $7.58 million recorded in the first six months of 2020.

In a bid to boost financial flexibility amid the pandemic-related uncertainties, Standard Motor has suspended its quarterly payouts and stock-buyback programs.

Zacks Rank & Other Stocks to Consider

Currently, Standard Motor carries a Zacks Rank #1 (Strong Buy).

Other top-ranked stocks in the auto sector include AutoNation AN, Geely Automobile Holdings Ltd. GELYY and LCI Industries LCII. While AutoNation sports a Zacks Rank of 1, Geely Automobile and LCI Industries carry a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of AutoNation have rallied 8.8%, year to date, compared with the industry’s gain of 5.1%.

Shares of Geely Automobile have climbed 10.3%, year to date, as against the industry’s decline of 15.7%.

Shares of LCI Industries have appreciated 22.1%, year to date, as against the industry’s decline of 8.3%.

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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.