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Standard Motor Product Inc. ( SMP - Analyst Report ) posted a 24% decline in profits to $5.4 million or 23 cents per share in the first quarter of 2012 from $7.1 million or 31 cents in the corresponding quarter of last year (excluding non-operational gains and losses in the quarters). The EPS was lower than the Zacks Consensus Estimate of 33 cents.
Revenues in the quarter went down 4% to $211.7 million from $220.2 million in the year-ago quarter, missing the Zacks Consensus Estimate of $232 million. The decline in revenues was driven by change in customers buying patterns and diversification of one of the Temperature Control customers, who started purchasing product directly from China.
Gross profits of the company increased 3% to $55 million from $53 million in the year-ago quarter. Gross margins improved to 26% from 24% in the prior year. Cost of sales decreased 6% to $157 million in the quarter. However, operating income declined to $9.7 million or 5% of sales compared to $12 million or 6% in the first quarter of 2011.
Revenues from the Engine Management segment decreased marginally to $163 million in the quarter from $164 million in the year-ago quarter. Operating profit decreased to $14.0 million or 8.6% of sales compared to $15.2 million or 9.2%. Selling, general and administrative expenses increased to $29 million or 17.8% of sales from $25 million or 15.1% of sales.
Revenues from Temperature Control segment went down 17% to $45 million. Operating profits from this segment were $67 thousand or 0.1% of sales compared to $1.2 million or 2.3% in the corresponding quarter last year. Selling, general and administrative expenses decreased 6% to $8.5 million or 18.8% of sales in the quarter.
Standard Motors had $9 million in cash as of March 31, 2012, down from $11 million as of March 31, 2011. Long-term debt of the company was $278 thousand as of March 31, 2012, down from $299 thousand as of March 31, 2011.
The company will be paying a quarterly dividend of 9 cents per share on the outstanding common stock. The dividend is due on June 1, 2012 to shareholders of record as of May 15, 2012.
Standard Motor is in an advantageous position due to the recent acquisition of Compressor Works, which is a manufacturer of Temperature Control products with a capacity of $60 million. The acquisition will lead to cost savings and boost earnings for Standard Motor in 2012.
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