Standard Motor Products
(SMP) showed a rise in profit to $3.1 million or 14 cents per share in the first quarter of 2010 from $1.3 million or 7 cents per share in the year-ago quarter. However, the company missed the Zacks Consensus Estimate of 17 cents per share.
Consolidated sales in the quarter scaled up 4% to $179.4 million, driven mainly by a strong performance in the Engine Management segment. Operating profit was $6.4 million compared with $3.7 million a year ago.
Sales in the Engine Management segment rose 10% to $137 million, while the Temperature Control segment was flat at $40 million. Operating profit increased 17% to $10 million in the Engine Management segment and soared 130% to $345,000 in the Temperature Control segment.
Standard Motor’s cash balance rose to $15 million as of March 31, 2010 from $11 million as of December 31, 2009. Long-term debt was flat at $18 million compared with the period ended December 31, 2009. The long-term debt to capitalization ratio was as low as 8% at the end of the quarter.
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.
However, its customer base is concentrated, with the top five customers accounting for more than 50% of sales. We continue to maintain our long-term recommendation on the stock as “Neutral”.

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