A month has gone by since the last earnings report for Standard Motor Products (SMP Quick QuoteSMP - Free Report) . Shares have added about 0.1% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Standard Motor Products due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Standard Motor Q4 Earnings Beat But Fall Y/Y

Standard Motor reported fourth-quarter 2021 adjusted earnings of 90 cents per share, beating the Zacks Consensus Estimate of 66 cents.  However, the bottom line declined from the prior-year quarter’s $1.08 due to non-recurring benefits related to the pandemic.

Total revenues jumped 9.6% year over year to $309.9 million, surpassing the Zacks Consensus Estimate of $286.3 million. Gross profit fell to $88.6 million from the year-ago quarter’s $94.1 million. Operating income declined 20.8% to $24.2 million. A surge in various costs, mainly in the Engine Management segment, resulted in a fall in profit margins. A second factor is related to an ongoing mix shift within the division in the specialized original equipment business, which has a different margin profile from the company’s aftermarket business.

The board approved a dividend increase from 25 cents to 27 cents per share, payable on Mar 1, 2022, to stockholders of record on Feb 15, 2022. The company repurchased common shares worth $26.9 million during the year.

Segmental Results

During the reported quarter, revenues from the Engine Management segment totaled $245.5 million, up 6% year over year. The upside was driven by a combination of strong demand, continued success from customer initiatives, new business wins and the positive impact of recent acquisitions and the partial benefit of price increases implemented in the quarter. The operating income was $28.2 million compared with the prior-year quarter’s $39.2 million.

Revenues from the Temperature Control segment rose 26.6% year over year to $60.4 million, led by a surge in sales on account of one of the hottest summers. The segment registered an operating income of $3.5 million, rising from $1 million.

Revenues from the All Other segment came in at $3.9 million, rising from $3.1 million in the prior-year period. The segment reported an operating loss of $7.2 million, marginally wider than the loss of $7.1 million incurred in the corresponding quarter of 2020.

Financial Position

Standard Motor had cash and cash equivalents of $21.7 million as of Dec 31, 2021, compared with $19.5 million as of Dec 31, 2020. Long-term debt was $21,000 compared with $97,000 recorded as of Dec 31, 2020. Net cash provided by operating activities totaled $85.6 million as of Dec 31, 2021, compared with $97.9 million provided in the corresponding period last year.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

The consensus estimate has shifted -12.9% due to these changes.

VGM Scores

At this time, Standard Motor Products has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Standard Motor Products has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.