Standard Motor Products Inc. (SMP) saw a profit of $2.6 million or 11 cents per share (excluding non-operational gains and losses) in the fourth quarter of 2010, exceeding the Zacks Consensus Estimate by 8 cents per share.
The profit rose from $398,000 or 2 cents per share (excluding non-operational gains and losses) in the fourth quarter of 2009 led by strong growth in the aftermarket, new business from the acquisition of Federal-Mogul Corp.‘s (FDML) wire line and hot summer favorably affecting the company’s Temperature Control business.
Consolidated net sales in the quarter grew 8% to $173 million from $160.1 million in the corresponding quarter of 2009. It was higher than the Zacks Consensus Estimate of $163 million. Excluding the results of European distribution business (sold in November 2009) in the fourth quarter of 2009, sales went up 12% during the quarter.
The company had an operating profit of $6.5 million (3.8%) in contrast to an operating loss of $5.0 million (3.1%) in the comparable quarter of 2009. The improvement was attributable to lower restructuring and integration expenditure.
Revenues in the Engine Management segment escalated 10% to $133.8 million. Operating profit in the segment almost doubled to $8.9 million (6.6%) from $4.6 million (3.8%) in the fourth quarter of 2009. Revenues in the Temperature Control segment went up 16% to $36.4 million. However, operating profit fell significantly to $260,000 (0.7%) from $936,000 (3%) due to higher cost.
For full year 2010, Standard Motor reported a profit of $24.2 million or $1.07 per share compared with $13.5 million or 70 cents per share a year ago (all excluding non-operational gains and losses). The profit was higher than the Zacks Consensus Estimate of 94 cents per share.
Consolidated net sales increased 10% to $810.9 million, surpassing the Zacks Consensus Estimate of $801 million. Excluding the results of European distribution business, sales grew 14% during the year. Operating profit more than doubled to $46.8 million (5.8%) from $17.6 million (2.4%) a year ago driven by lower restructuring and integration expenses.
Standard Motor’s cash balance rose to $12.1 million as of December 31, 2010 from $10.6 million as of December 31, 2009. Long-term debt was almost flat at $12.7 million compared with $12.6 million in the corresponding period of 2009. The long-term debt-to-capitalization ratio was 5.7% as of December 31, 2010 compared with 6.1% a year ago.
Standard Motor Products, based in Long Island City, New York, is engaged in manufacturing and distributing replacement parts for motor vehicles. The major competitive advantages of the company are a trained sales force, extensive product range, sophisticated parts cataloging systems and an effective inventory management. As a result, the company retains a Zacks #2 Rank (Buy) on its stock for the short term and we have recommended the shares of the company as “Outperform” for the long term.
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