Standard Motor Beats Estimate - Analyst Blog
02 August 2011 - 10:15PM
Zacks
Standard Motor Products Inc. (SMP) reported
earnings of $13.7 million or 59 cents
per share substantially improving from $8.1 million or 35 cents per
share in the second quarter of 2010.
Reported
income in the quarter included a post-retirement curtailment gain
of $2.19 million or 9 cents per share and another gain of $157,000
or 1 cent per share from sale of assets whereas, the last year
quarter included a gain of $125,000 or 1 cent per share from sale
of assets along with restructuring and integration expenses of
$774,000 or 4 cents per share.
Excluding these items, adjusted earnings of the company stood at
$11.4 million or 49 cents per share compared with $8.7 million or
38 cents per share in the year-ago quarter. Earnings per share also
exceeded the Zacks Consensus Estimate of 45 cents per share.
Consolidated net sales in the quarter grew 5.6% to $244.0
million from $231.0 million in the corresponding quarter of 2010.
Both the business segments saw modest improvements in sales. The company
recently strengthened its Engine Management product line by
utilizing BLD Products’ wide product portfolio.
The company had a gross profit of $63.2 million compared with a
gross profit of $58.4 million in the comparable quarter of 2010.
The improvement was primarily driven by the company’s efficient
cost management efforts, such as relocating to low cost
manufacturing sites, purchasing product from low cost areas and lower
overheads.
Revenues from the Temperature Control segment amounted to $79.7
million, up 7.8% from last year’s $73.9 million. Gross profit from
the segment totaled $19.6 million up 10.7% year over year.
On the other hand, revenues in the Engine Management segment
escalated 4.6% to $159.9 million. Gross profit in the segment also
climbed up 6.7% to $40 million in the second quarter of 2011.
Standard Motor’s cash balance improved slightly to $13.1 million
as of June 30, 2011 from $12.1 million as of December 31, 2010.
Long-term debt was reported at $258,000 at the end of the second
quarter of 2011 versus $307,000 as of December 31, 2010.
The Board of Directors also announced a
payment a quarterly dividend of 7 cents on September 01, 2011 to
its stockholders of record on August 15, 2011.
The Long
Island City, New York-based Standard Motor is one of the leading
manufacturers, distributors and marketers of automotive replacement
parts in the U.S. and enjoys a strong competitive advantage
due to its brand recognition and customer base. Moreover, is not
significantly exposed to the cyclicality of the automotive industry
since it is focused on the aftermarket, where it is a leading niche
market player.
However, high customer concentration, weak pricing in the
Temperature Control segment and intensifying competition may hamper
its growth in the coming years. The company’s key competitors
include Federal-Mogul Corporation (FDML), Robert
Bosch Corporation and Visteon Corporation
(VC).
Thus, the shares of Standard Motor are maintaining a Zacks#3
Rank, which translates into a short-term Hold rating.
FEDERAL MOGUL-A (FDML): Free Stock Analysis Report
STANDARD MOTOR (SMP): Free Stock Analysis Report
VISTEON CORP (VC): Free Stock Analysis Report
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