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Standard Motor Products (SMP) Up 18.6% Since Last Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for Standard Motor Products (SMP - Free Report) . Shares have added about 18.6% in that time frame, outperforming 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 Q3 Earnings & Revenues Beat, Up Y/Y

Standard Motor reported third-quarter 2018 adjusted earnings of 83 cents per share, beating the Zacks Consensus Estimate of 82 cents. Further, the bottom line was higher than the prior-year quarter figure of 74 cents per share. During the quarter under review, the company witnessed signs of recovery. This trend is likely to continue through the rest of the year.

During the quarter under review, earnings from continuing operations were $19.3 million compared with $17.1 million in the prior-year quarter.

During the reported quarter, total revenues increased to $296.6 million from $281.1 million a year ago. Moreover, the top line surpassed the Zacks Consensus Estimate of $291 million.

Gross profit increased to $87.3 million from $82.5 million in the year-ago quarter. Operating income also increased to $27.2 million from $26.8 million in the year-ago quarter.

Segmental Results

During the reported quarter, revenues in the Engine Management segment increased to $197.6 million from $196.8 million a year ago.

Operating income was $21.6 million (11% of sales) compared with $23.5 million (12% of sales) in the prior-year quarter.

Revenues at the Temperature Control segment increased to $96.1 million from $81.2 million a year ago. The segment recorded operating income of $8.6 million (8.9% of sales) compared with $8.1 million (9.9% of sales) in the third quarter of 2017.

Revenues at the All Other segment decreased to $3 million from $3.1 million a year ago. The segment registered an operating loss of $3 million, lower than the loss of $4 million in the third quarter of 2017.

Financial Position

Standard Motor had cash and cash equivalents of $27.3 million as of Sep 30, 2018, compared with $25.4 million as of Sep 30, 2017. Other long-term debt was $26,000 as of Sep 30, 2018, compared with $79,000 as of Dec 31, 2017.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

VGM Scores

At this time, Standard Motor Products has a great Growth Score of A, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second 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 trending upward for the stock, and the magnitude of this revision looks promising. Notably, Standard Motor Products has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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