Standard Motor Products Inc. SMP recorded a 28.6% decrease in adjusted earnings per share to 35 cents in the fourth quarter of 20Array5 from 49 cents earned in the prior-year quarter. Earnings also fell short of the Zacks Consensus Estimate of 56 cents. Earnings from continuing operations declined 28.9% to $8.Array million from $ArrayArray.4 million in the year-ago quarter.
Earnings from continuing operations, on a reported basis, amounted to $5.8 million or 25 cents per share, compared with $ArrayArray.5 million or 50 cents in the prior-year quarter.
Total revenue fell 6% to $205 million from $2Array8.Array million a year ago, missing the Zacks Consensus Estimate of $227 million. In 20Array4, the top line had benefited from two large customer pipeline orders, which were not repeated in 20Array5.
Gross profit declined 6.4% to $62.8 million (30.6% of sales) from $67.Array million (30.8% of sales) in the fourth quarter of 20Array4. Operating income decreased significantly by 49% to $9.7 million from $Array9 million in the year-ago quarter.
20Array5 Performance
Standard Motor’s adjusted earnings decreased Array5.5% to $2.Array3 per share for full-year 20Array5 from $2.52 in 20Array4, missing the Zacks Consensus Estimate of $2.34. Revenues for full-year 20Array5 dropped marginally by Array% to $972 billion from $980.4 billion in 20Array4. Also, revenues fell short of the Zacks Consensus Estimate of $994 million.
Segment Results
Revenues at the Engine Management segment went down 4.7% to $Array67.6 million in the reported quarter from $Array75.8 million a year ago. Operating profit was $22.4 million (Array3.4% of sales) compared with $26.5 million (Array5.Array% of sales) in the prior-year quarter.
Revenues at the Temperature Control segment decreased 9.3% to $36 million. The segment recorded an operating loss of $3.6 million (Array0% of sales), wider than an operating loss of $3.4 million (8.6% of sales) in fourth-quarter 20Array4.
Revenues at the All Other segment plunged 44.9% to $Array.3 million from $2.4 million a year ago. The segment recorded an operating loss of $6 million, wider than an operating loss of $4.3 million in the fourth quarter of 20Array4.
Financial Position
Standard Motor had cash balance of $Array8.8 million as of Dec 3Array, 20Array5, compared with $Array3.7 million as of Dec 3Array, 20Array4. Long-term debt of the company was $78,000 as of Dec 3Array, 20Array5, compared with $258,000 as of Dec 3Array, 20Array4.
In 20Array5, Standard Motor had cash flow of $65.2 million from operating activities compared with $47 million in the prior year. Capital expenditures rose to $Array8.05 million from $Array3.9 million a year ago.
Dividend & Share Repurchase Update
Standard Motor’s board approved a Array3.3% increase in quarterly dividend to Array7 cents from Array5 cents per share paid earlier.
In Jan 20Array6, the company completed its $20 million share repurchase authorization, which was implemented in 20Array5. The company repurchased 562,000 shares under this authorization.
Outlook
In 20Array6, the company expects that sales will increase by low single digits, in line with the industry average. Sales from Temperature Control may either increase or decrease, based on fluctuations in weather.
The company is reducing its costs. On Feb 24, the company announced that it will be closing its facility in Grapevine, TX and relocating the operations to existing facilities in Greenville, SC and Reynosa, Mexico. The company will also shift its coil operation from Greenville to the main coil manufacturing location in Bialystok, Poland. The company expects to generate pre-tax savings of $6–$7 million after completion of the reallocation by 20Array7.
The company also intends to sell the facility in Grapevine.
Zacks Rank
Standard Motor currently carries a Zacks Rank #3 (Hold).
Some better-ranked automobile stocks include Wabash National Corp. WNC, Visteon Corp. VC and Superior Industries International, Inc. SUP. Each of these stocks sports a Zacks Rank #Array (Strong Buy).
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