Strong 3Q for Standard Motor

Standard Motor Products Inc. (SMP - Analyst Report) reported earnings of $14.1 million or 61 cents per share from continuing operations in the third quarter of 2011 compared with $11.1 million or 48 cents per share in the year-ago quarter.

Reported earnings per share included a tax gain of 2 cents compared with a similar tax gain of 4 cents and a gain of 4 cents from sale of assets in the prior-year quarter.

Excluding these items, adjusted earnings of the company stood at $13.7 million or 59 cents per share as against $9.8 million or 43 cents per share in the third quarter of 2010. Earnings per share comprehensively beat the Zacks Consensus Estimate of 48 cents.

Consolidated net sales in the quarter grew 3.8% year over year to $236.2 million, driven by improved performance by the Engine Management segment, partly offset by lower sales from the Temperature Control segment. Sales in the quarter were at par with the Zacks Consensus Estimate of $236.0 million.

Standard Motor witnessed a 7.5% year-over-year increase in gross profit to $64.5 million, partly mitigated by a 2.5% growth in costs. The company is constantly making efforts to reduce costs mainly through relocation of facilities to low cost manufacturing sites, purchasing product from low cost areas and by lowering overheads.

Revenues from the Engine Management segment escalated 7.6% to $165.2 million. Gross profit in the segment climbed 10.1% to $43.8 million in the third quarter of 2011. The company recently strengthened its Engine Management product line by utilizing BLD Products’ wide product portfolio.

On the other hand, revenues from the Temperature Control segment amounted to $68.1 million, down 5.2% year over year from $71.8 million. Gross profit for the segment remained almost unchanged at $17.3 million.

Standard Motor’s cash balance improved to $14.9 million as of September 30, 2011 from $12.1 million as of December 31, 2010. Long-term debt, however, declined to $221,000 at the end of the third quarter of 2011 from $307,000 as of December 31, 2010.

The company’s board of directors also announced a quarterly dividend of 7 cents on December 01, 2011 to its stockholders as of November 15, 2011.

The Long Island City, New York-based Standard Motor, a Zacks #3 Rank (Hold rating) stock, is one of the leading manufacturers, distributors and marketers of automotive replacement parts in the U.S. The company’s key competitors include Federal-Mogul Corporation (FDML - Snapshot Report), Robert Bosch Corporation and Visteon Corporation (VC - Snapshot Report).

The major competitive advantages of the company are its trained sales force, extensive product range, sophisticated parts-cataloging systems and effective inventory management.

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