It has been about a month since the last earnings report for Standard Motor Products (SMP Quick QuoteSMP - Free Report) . Shares have lost about 11.3% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Standard Motor Products due for a breakout? 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 Sales Miss Mark

Standard Motor Products reported fourth-quarter 2022 adjusted earnings of 69 cents per share, beating the Zacks Consensus Estimate of 52 cents. Higher-than-anticipated operating income from the Engine Management resulted in the outperformance. But the bottom line declined 23% from the prior-year quarter’s 90 cents a share.

Total revenues fell 0.5% year over year to $308.2 million and also fell short of the Zacks Consensus Estimate of $337 million. However, gross profit rose to $89.6 million from the year-ago quarter’s $88.7 million. Operating income fell to $15.7 million, down from $24.2 million reported in the year-ago quarter.

Segmental Results

During the reported quarter, revenues from the Engine Management segment totaled $242.4 million, down 1.3% year over year. The figure also lagged the Zacks Consensus Estimate of $255 million. The operating income was $26.5 million, down from the prior-year quarter’s $28.3 million but it crossed the consensus mark of $19.42 million.

Revenues from the Temperature Control segment rose 5% year over year to $63.5 million but the figure lagged the consensus metric of $79 million. The segment registered an operating income of $2.2 million, down from $3.5 million and lagging the consensus mark of $2.64 million.

Revenues from the All Other segment came in at $2.29 million, down from $3.92 million recorded in the year-ago quarter and missing the consensus mark of $3.22 million. The segment reported an operating loss of $4.2 million, narrower than a loss of $7.2 million recorded in the year-ago quarter and the Zacks Consensus Estimate of a loss of $4.69 million.

The company also announced segment reporting changes beginning this year. Notably, SMP has introduced one new operating segment and renamed one of its existing segments. The new segment, called SMP Engineering Solutions, will focus on custom-designed parts for vehicles and OEMs. The Engine Management Segment will now be known as Vehicle Control to precisely reflect the products and categories that SMP has to offer.

Financial Position

Standard Motor had $21.2 million in cash as of Dec 31, 2022, compared with $21.8 million as of Dec 31, 2021. Net cash outflow from operating activities totaled $27.5 million in the fourth quarter of 2022 compared to $85.6 million in net cash inflow from operating activities in the corresponding period last year. SG&A expenses flared up 12% to $72 million.

Outlook

For full-year 2023, the company expects sales to grow by a low single-digit number. The adjusted EBITDA will be nearly 10%.

How Have Estimates Been Moving Since Then?

It turns out, estimates review flatlined during the past month.

VGM Scores

At this time, Standard Motor Products has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, 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

Standard Motor Products has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.