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Standard Motor (SMP) Q2 Earnings Beat Estimates; Stock Up
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Share price of Standard Motor Products Inc. (SMP - Free Report) increased 4.1% to $43.39 on Aug 3 after the company reported a significant 49.2% improvement in adjusted earnings per share to 88 cents in the second quarter of 2016 from 59 cents earned in the prior-year quarter. Earnings also exceeded the Zacks Consensus Estimate of 74 cents. Adjusted earnings from continuing operations increased to $20.2 million from $13.6 million in the year-ago quarter.
Earnings from continuing operations, on a reported basis, amounted to $19.9 million or 86 cents per share, rising from $13.8 million or 59 cents in the prior-year quarter.
Total revenue rose 7.3% to $289 million from $269.4 million a year ago, surpassing the Zacks Consensus Estimate of $280 million.
Gross profit increased 19.7% to $87.1 million (30.1% of sales) from $72.8 million (27% of sales) in the second quarter of 2015. Operating income improved to $31.8 million from $21.3 million in the year-ago quarter.
Revenues at the Engine Management segment went up to $198.8 million in the reported quarter from $177 million a year ago. Operating profit was $30.6 million (15.4% of sales) compared with $21.8 million (12.3% of sales) in the prior-year quarter.
Revenues at the Temperature Control segment fell 1.8% to $87.5 million. The segment recorded an operating profit of $6.3 million (7.2% of sales), up from $3.2 million (3.6% of sales) in second-quarter 2015.
Revenues at the All Other segment decreased to $2.6 million from $3.3 million a year ago. The segment recorded an operating loss of $4.6 million, wider than an operating loss of $4 million in the second quarter of 2015.
Financial Position
Standard Motor had cash balance of $12.4 million as of Jun 30, 2016, compared with $18.8 million as of Dec 31, 2015. Long-term debt of the company was $186,000 as of Jun 30, 2016, compared with $78,000 as of Dec 31, 2015.
In the first half of 2016, Standard Motor had cash flow of $23.7 million from operating activities compared with $26.2 million in the prior-year period. Capital expenditures were almost in line with the year-ago level of $10.2 million.
Dividend
Standard Motor’s board approved a dividend of 17 cents per share. The dividend will be paid on Sep 1, to shareholders on record as of Aug 15, 2016.
Outlook
Standard Motor expects sales in the Engine Management segment to increase in the low- to mid-single digit range this year. The company envisions annual gross margin for the Temperature Control segment to be in the 23%–24% range.
Standard Motor currently sports a Zacks Rank #1 (Strong Buy). Some other well-ranked automobile stocks include The Goodyear Tire & Rubber Company (GT - Free Report) , Johnson Controls Inc. (JCI - Free Report) and Gentex Corp. (GNTX - Free Report) , each carrying a Zacks Rank #2 (Buy).
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Standard Motor (SMP) Q2 Earnings Beat Estimates; Stock Up
Share price of Standard Motor Products Inc. (SMP - Free Report) increased 4.1% to $43.39 on Aug 3 after the company reported a significant 49.2% improvement in adjusted earnings per share to 88 cents in the second quarter of 2016 from 59 cents earned in the prior-year quarter. Earnings also exceeded the Zacks Consensus Estimate of 74 cents. Adjusted earnings from continuing operations increased to $20.2 million from $13.6 million in the year-ago quarter.
Earnings from continuing operations, on a reported basis, amounted to $19.9 million or 86 cents per share, rising from $13.8 million or 59 cents in the prior-year quarter.
Total revenue rose 7.3% to $289 million from $269.4 million a year ago, surpassing the Zacks Consensus Estimate of $280 million.
Gross profit increased 19.7% to $87.1 million (30.1% of sales) from $72.8 million (27% of sales) in the second quarter of 2015. Operating income improved to $31.8 million from $21.3 million in the year-ago quarter.
Segment Results
Revenues at the Engine Management segment went up to $198.8 million in the reported quarter from $177 million a year ago. Operating profit was $30.6 million (15.4% of sales) compared with $21.8 million (12.3% of sales) in the prior-year quarter.
Revenues at the Temperature Control segment fell 1.8% to $87.5 million. The segment recorded an operating profit of $6.3 million (7.2% of sales), up from $3.2 million (3.6% of sales) in second-quarter 2015.
Revenues at the All Other segment decreased to $2.6 million from $3.3 million a year ago. The segment recorded an operating loss of $4.6 million, wider than an operating loss of $4 million in the second quarter of 2015.
Financial Position
Standard Motor had cash balance of $12.4 million as of Jun 30, 2016, compared with $18.8 million as of Dec 31, 2015. Long-term debt of the company was $186,000 as of Jun 30, 2016, compared with $78,000 as of Dec 31, 2015.
In the first half of 2016, Standard Motor had cash flow of $23.7 million from operating activities compared with $26.2 million in the prior-year period. Capital expenditures were almost in line with the year-ago level of $10.2 million.
Dividend
Standard Motor’s board approved a dividend of 17 cents per share. The dividend will be paid on Sep 1, to shareholders on record as of Aug 15, 2016.
Outlook
Standard Motor expects sales in the Engine Management segment to increase in the low- to mid-single digit range this year. The company envisions annual gross margin for the Temperature Control segment to be in the 23%–24% range.
STANDARD MOTOR Price, Consensus and EPS Surprise
STANDARD MOTOR Price, Consensus and EPS Surprise | STANDARD MOTOR Quote
Zacks Rank
Standard Motor currently sports a Zacks Rank #1 (Strong Buy). Some other well-ranked automobile stocks include The Goodyear Tire & Rubber Company (GT - Free Report) , Johnson Controls Inc. (JCI - Free Report) and Gentex Corp. (GNTX - Free Report) , each carrying a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>