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Standard Motor (SMP) Q4 Earnings Surpass Estimates, Up Y/Y

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Standard Motor Products Inc. SMP reported adjusted earnings of 59 cents per share in fourth-quarter 2019, beating the Zacks Consensus Estimate of 57 cents. Further, the bottom line comes in higher than the prior-year quarter’s 52 cents per share. The company delivered better-than-expected results on stellar revenues from the Engine Management and All Other segments.

During the fourth quarter, earnings from continuing operations were $13.6 million compared with the $11.8 million recorded in the prior-year quarter. During the reported quarter, total revenues decreased to $241.3 million, missing the Zacks Consensus Estimate of $243 million. The reported tally also comes in lower than the year-ago figure of $247 million.

Gross profit increased to $72.84 million from the year-ago quarter’s $71.6 million. Operating income slid to $17.5 million from the $18.43 million recorded in the year-ago quarter.

Standard Motor Products, Inc. Price, Consensus and EPS Surprise

Segmental Results

During the December-end quarter, revenues from the Engine Management segment edged down 0.5% year on year to $201.9 million. However, the reported figure surpassed the Zacks Consensus Estimate of $198 million. Operating income was $27.38 million compared with the $23.92 million registered in the prior-year quarter. The segment benefited from the completion of the integration of wire operations in Mexico and the company’s cost-containment efforts.

Revenues in the Temperature Control segment decreased 12.1% year over year to $36.72 million. The revenue figure also missed the Zacks Consensus Estimate of $42.20 million. The segment posted an operating loss of $3.01 million, narrower than the operating loss of $3.49 million reported in fourth-quarter 2018.

Revenues in the All Other segment rose to $2.57 million from the $2.19 million recorded in the prior year. Also, the top-line figure surpassed the Zacks Consensus Estimate of $2.55 million. The segment reported an operating loss of $5.76 million, wider than the loss of $4.56 million posted in fourth-quarter 2018.

Financial Position

Standard Motor had cash and cash equivalents of $10.37 million as of Dec 31, 2019, compared with $11.14 million as of Dec 31, 2018. Other long-term debt was $129,000 as of Dec 31, 2019, compared with $153,000 as of Dec 31, 2018.

Dividend Update

The company’s board of directors has approved a quarterly dividend of 23-25 cents per common share. This dividend will be paid out on Mar 2, to shareholders as of Feb 14, 2020.

Zacks Rank & Stocks to Consider

Standard Motor currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the Auto-Tires-Trucks sector include BRP Inc. DOOO, Fox Factory Holding Corp. (FOXF - Free Report) and SPX Corporation SPXC, each carrying a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

BRP has a projected earnings growth rate of 20.17% for 2020. Its shares have surged 73.3% over the past year.

Fox Factory has an estimated earnings growth rate of 9.67% for the ongoing year. The company’s shares have appreciated 16.1% in a year’s time.

SPX has an expected earnings growth rate of 6.52% for the current year. The stock has rallied 36.7% in the past year.

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