A month has gone by since the last earnings report for Standard Motor Products (SMP Quick QuoteSMP - Free Report) . Shares have lost about 2.7% 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 its latest earnings report in order to get a better handle on the important catalysts.

SMP Q2 Earnings Miss Estimates

Standard Motor reported second-quarter 2026 adjusted earnings of $1.40 per share, up 8.6% year over year but below the Zacks Consensus Estimate of $1.42 by 1.4%. Reported net sales rose 1.6% to $501.6 million and missed the consensus mark of $509 million by 1.5%.

Vehicle Control softness weighed on the quarter, while Temperature Control, Nissens and Engineered Solutions posted growth. Customer point-of-sale demand in Vehicle Control remained positive, and adjusted EBITDA reached a record $63.5 million.

North American Aftermarket Shows Mixed Results

Vehicle Control adjusted net sales declined 1.6% year over year to $198.6 million. The decline reflected customer order timing after a strong first quarter and a significant drop in wire sets as customers adjusted inventories around the category's secular decline.

Temperature Control adjusted net sales jumped 15.7% to $152.0 million. Preseason order timing shifted more heavily into the second quarter and outweighed cooler, wetter weather in May and early June. Year-to-date adjusted sales were up 9.6%.

Europe and Engineered Sales Advance

Nissens Automotive adjusted net sales increased 4.8% to $94.9 million. Local-currency sales rose 2.3%, with stronger currency conversion providing additional support. Engine efficiency products were a bright spot, while air-conditioning demand faced a late start to the European summer.

Engineered Solutions adjusted net sales climbed 16.8% to $82.0 million as demand improved across end markets. Management expects growth to moderate in the second half as comparisons become tougher following the recovery that began in the latter half of 2025.

Profitability Expands as Costs Shift

Gross profit rose to $164.6 million from $150.9 million, while gross margin expanded to 32.8% from 30.6%. Operating income increased to $50.8 million from $42.8 million, lifting operating margin to 10.1% from 8.7%.

Selling, general and administrative expenses increased to $113.5 million from $107.5 million. Vehicle Control profitability was pressured by higher distribution costs tied to the Shawnee, Kansas, warehouse transition, freight expense and inflation, while Engineered Solutions faced inflationary pressure on gross margin.

Standard Motor Improves Cash Flow and Leverage

For the first six months of 2026, operating cash flow was $58.3 million compared with $5.9 million used in the year-ago period. The $64.2 million improvement reflected lower inventory and the timing of tariff refunds. Capital expenditures were $14.9 million.

Inventory declined to $684.2 million from $727.9 million at year-end 2025. Net debt fell to $510.2 million from $599.4 million at the end of the first quarter, and net debt leverage improved to 2.5 times from 3.0 times.

SMP Adds Supply Chain Capacity Through Techstrong

During the quarter, SMP completed a joint venture with Techstrong and acquired 50% of its Thailand sensor manufacturing operation. Management expects the arrangement to broaden Vehicle Control manufacturing, diversify the supply chain and provide a lower-cost production base.

The company also continued to pursue cross-selling opportunities with Nissens. Newly launched European categories include ignition coils and air-conditioning hoses, both sourced from manufacturing operations already within SMP's broader network.

2026 Guidance Reaffirmed

Standard Motor reaffirmed its 2026 outlook for low to mid-single-digit sales growth and an adjusted EBITDA margin of 11% to 12%. The company expects tougher second-half comparisons in Temperature Control and Engineered Solutions and less benefit from foreign-currency translation in Nissens.

The outlook excludes ongoing tariff changes, significant inflationary effects from the Middle East conflict and higher interest rates affecting customer supply-chain financing programs. SMP expects about $30 million of interest expense, a 27.5% to 28% tax rate and $45 million to $50 million of depreciation and amortization for 2026. The board also approved a 33-cent quarterly dividend payable Sept. 1, 2026, to shareholders of record Aug. 14.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

The consensus estimate has shifted -10.9% due to these changes.

VGM Scores

Currently, Standard Motor Products has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock has a grade of A on the value side, putting it in the top 20% for value investors.

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. It's no surprise Standard Motor Products has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

Performance of an Industry Player

Standard Motor Products is part of the Zacks Automotive - Replacement Parts industry. Over the past month, LKQ (LKQ Quick QuoteLKQ - Free Report) , a stock from the same industry, has gained 2.6%. The company reported its results for the quarter ended June 2026 more than a month ago.

LKQ reported revenues of $3.41 billion in the last reported quarter, representing a year-over-year change of -6.4%. EPS of $0.67 for the same period compares with $0.87 a year ago.

For the current quarter, LKQ is expected to post earnings of $0.70 per share, indicating a change of -16.7% from the year-ago quarter. The Zacks Consensus Estimate has changed -3.9% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #5 (Strong Sell) for LKQ. Also, the stock has a VGM Score of B.