A downtrend has been apparent in Standard Motor Products (SMP) lately with too much selling pressure. The stock has declined 10.2% over the past four weeks. However, given the fact that it is now in oversold territory and Wall Street analysts are majorly in agreement about the company's ability to report better earnings than they predicted earlier, the stock could be due for a turnaround.Here is How to Spot Oversold StocksWe use Relative Strength Index (RSI), one of the most commonly used technical indicato ...

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.On top of the ...

Core Viewpoint - Standard Motor Products, Inc. is conducting its Fourth Quarter 2024 Earnings Conference Call to discuss its performance and financial results for the quarter [1][2]. Group 1: Company Overview - The call features key company participants including Eric Sills, Chairman and CEO, Nathan Iles, CFO, and Jim Burke, COO [2][3]. - The agenda includes an overview of performance by Eric Sills, followed by a financial results discussion by Nathan Iles, and concluding remarks with a Q&A session [3]. Group 2: Financial Performance - The conference call is expected to provide insights into the company's financial performance for the fourth quarter of 2024, although specific financial metrics are not detailed in the provided text [1][4].

Financial Data and Key Metrics Changes - Adjusted diluted earnings per share increased by 27% in Q4 and 8.6% for the full year [7][29] - Consolidated sales increased by 18.1% in Q4 and net sales for the full year were up 7.8%, with a 5.1% increase excluding Nissens [29][30] - Gross margin rate improved to 29.1% for the full year, driven by the Temperature Control business and the addition of Nissens [30] Business Line Data and Key Metrics Changes - Vehicle Control segment net sales in Q4 were $187.4 million, up 4.9%, with a full-year increase of 3.3% [22][8] - Temperature Control segment sales increased by 30% in Q4 and 12.5% for the full year, benefiting from favorable weather [24][10] - Engineered Solutions segment sales decreased by 7.9% in Q4 but increased by 1% for the full year due to new business wins [25][11] Market Data and Key Metrics Changes - The aftermarket, representing over 80% of the business, is expected to remain resilient amid economic uncertainty [41][42] - Nissens Automotive contributed $35.7 million in net sales and $3.2 million in adjusted EBITDA for the two months post-acquisition [26][14] Company Strategy and Development Direction - The company is focused on integrating Nissens Automotive and targeting $8 million to $12 million in cost reduction synergies within 24 months [17][16] - The strategy includes expanding product offerings and identifying complementary product categories across regions [18][19] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the aftermarket business despite potential tariff impacts [41][43] - The company anticipates mid-teen percentage growth for 2025, driven by Nissens and favorable North American aftermarket dynamics [36][37] Other Important Information - Cash generated from operations was $76.7 million, down from $144.3 million the previous year due to inventory normalization [33] - The company plans to maintain its dividend, increasing it to $0.31 per share, reflecting a nearly 7% increase [39] Q&A Session Summary Question: Contribution of Nissens to guided growth for '25 - Management expects cost synergies to materialize in 2025, but revenue synergies will take longer to realize [51][52] Question: Customer inventory levels and purchasing behavior - Management noted flat POS for Vehicle Control and strong POS for Temperature Control, with no significant pull forward in purchasing due to tariffs [56][58] Question: Inflation expectations for '25 - Management anticipates low single-digit inflation, aligning with customer expectations [60][62] Question: Exposure to tariffs across regions - The company has a global manufacturing presence and plans to pass through tariff costs to customers [68][70] Question: Performance of Nissens' segments - All three segments of Nissens are performing well, with engine cooling being the largest category [72][74] Question: Update on new facility in Kansas - The new facility is progressing well, with automation installation expected to be completed by the end of 2025 [78][79] Question: Growth expectations excluding Nissens - Management sees healthy trends in legacy businesses, with some lumpiness expected in Engineered Solutions [85][87] Question: Approach to artificial intelligence efficiencies - The company is exploring various applications of AI to improve efficiency and product offerings [99][100]

Core Viewpoint - Standard Motor Products (SMP) reported strong fourth-quarter 2024 results, with adjusted earnings per share (EPS) of 47 cents, exceeding estimates and showing year-over-year growth from 37 cents [1][2]. Financial Performance - Total revenues increased to $343 million from $291 million in the fourth quarter of 2023, surpassing the Zacks Consensus Estimate of $297 million [2]. - Gross profit rose to $101 million from $81.5 million year-over-year [2]. - Operating income decreased to $3.9 million from $9.9 million in the prior-year quarter [2]. Segmental Results - Vehicle Control segment revenues were $187.4 million, up 4.9% year-over-year, beating estimates due to strong demand; operating income was $17.2 million, slightly down from $17.4 million [3]. - Temperature Control segment revenues reached $58 million, up from $44.6 million year-over-year, with an operating income of $3.8 million compared to an operating loss of $3.3 million [4]. - Engineered Solutions segment revenues totaled $62.2 million, down 7.9% year-over-year, with operating income increasing to $1.9 million from $1.04 million [5]. - Nissens Automotive segment revenues were $35.7 million, with an operating income of $385,000 [5]. - Other segment reported an operating loss of $5.5 million, wider than the loss of $3.9 million in the prior year [5]. Financial Position - As of December 31, 2024, the company had $44.4 million in cash, up from $32.5 million a year earlier [6]. - Long-term debt increased to $535.2 million from $151.2 million year-over-year [6]. - Net cash provided by operating activities was $76.7 million at the end of the fourth quarter [6]. - SG&A expenses rose by 22.7% to $86.3 million [6]. Dividend and Guidance - The company increased its quarterly dividend by 6.9% to 31 cents per share, payable on March 3, 2025 [7]. - For 2025, SMP expects sales growth in the mid-teens and adjusted EBITDA to be in the range of 10-11% of total revenues [8].

Financial Performance - Consolidated net sales for 2024 were $1,463.8 million, an increase of $105.6 million, or 7.8%, compared to $1,358.3 million in 2023[164]. - Gross profit for 2024 was $423.3 million, with a gross profit margin of 28.9%, up from 28.6% in 2023[164][165]. - Operating income decreased to $80.6 million, or 5.5% of net sales, down from $92.7 million, or 6.8% in 2023[166][185]. - Selling, general and administrative expenses increased by $41.5 million to $335.1 million, representing 22.9% of net sales in 2024[166][182]. - Other non-operating income increased to $6.9 million in 2024 from $2.3 million in 2023, driven by higher equity income from joint ventures and favorable foreign currency exchange impacts[186]. - The income tax provision for 2024 was $19.4 million at an effective tax rate of 26.2%, compared to $18.4 million at 22.5% in 2023, influenced by non-deductible transaction costs from the acquisition of Nissens Automotive[188]. - Loss from discontinued operations was $26.1 million in 2024, down from $29 million in 2023, including pre-tax provisions of $29.3 million and $23.8 million for 2024 and 2023, respectively[189]. - Net earnings attributable to noncontrolling interest increased to $1.0 million in 2024 from $0.2 million in 2023, reflecting the impact of the Gwo Yng acquisition[190]. Segment Performance - The newly acquired Nissens Automotive segment contributed $35.7 million in net sales for the two months post-acquisition[165][175]. - Vehicle Control segment net sales increased by $24.6 million, or 3.3%, to $762.6 million in 2024[171]. - Temperature Control segment net sales rose by $42.3 million, or 12.5%, to $380.1 million, driven by warmer weather conditions[172]. - Engineered Solutions segment net sales increased by $2.9 million, or 1%, to $285.5 million, supported by new business wins[173][174]. - The gross margin percentage for the Nissens Automotive segment was 32.2% for the two months from the acquisition date[176]. Cash Flow and Investments - Operating cash flows decreased to $76.7 million in 2024 from $144.3 million in 2023, primarily due to a $36.9 million increase in inventories[193]. - Cash used in investing activities surged to $418.7 million in 2024 from $25.7 million in 2023, mainly due to the $372.5 million acquisition of Nissens Automotive[196]. - Cash provided by financing activities was $349.5 million in 2024, compared to cash used of $109.6 million in 2023, following the refinancing of the 2022 Credit Agreement[198]. - Outstanding borrowings under the 2024 Credit Agreement were $545.4 million as of December 31, 2024, compared to $156 million in 2023[210]. - The weighted average interest rate on borrowings under the 2024 Credit Agreement was 5.6% at December 31, 2024, up from 5.0% under the 2022 Credit Agreement[212]. - The company sold $884.7 million and $830.8 million of receivables for the years ended December 31, 2024 and 2023, respectively[216]. - Receivables presented at financial institutions and not yet collected as of December 31, 2024 and December 31, 2023 were approximately $5.8 million and $4.5 million, respectively[216]. - A charge related to the sale of receivables included in selling, general and administrative expenses was $48.5 million, $46 million, and $32 million for the years ended December 31, 2024, 2023, and 2022, respectively[216]. - The company anticipates that cash flow from operations, available cash, and borrowings under the 2024 Credit Agreement will be adequate to meet future liquidity needs for at least the next twelve months[222]. - Material cash commitments as of December 31, 2024 include required cash payments of $545.4 million under the 2024 Credit Agreement and future minimum cash requirements of $144.8 million through 2034 under operating leases[221]. Restructuring and Expenses - Restructuring and integration expenses were $7.7 million in 2024, up from $2.6 million in 2023, primarily due to the Separation Program[168][184]. - The company recorded a $7 million pre-tax charge in selling, general and administrative expenses due to a customer's bankruptcy in January 2023[218]. Stock and Shareholder Actions - As of the first half of 2024, the company repurchased 321,229 shares of common stock for a total cost of $10.4 million under a $30 million stock repurchase program authorized in July 2022[220]. Risks and Assessments - The company faces risks related to supply chain financing arrangements, including potential adverse effects from increased benchmark reference rates[217]. - The company assesses long-lived assets and goodwill for impairment whenever events indicate that the carrying value may not be recoverable[230]. - The company plans to perform an annual actuarial evaluation of asbestos-related liabilities and does not currently believe that additional provisions will materially affect liquidity or financial position[236].

Core Insights - Standard Motor Products (SMP) reported revenue of $343.35 million for the quarter ended December 2024, reflecting an 18.1% increase year-over-year [1] - The earnings per share (EPS) for the quarter was $0.47, up from $0.37 in the same quarter last year [1] - The reported revenue exceeded the Zacks Consensus Estimate of $293.57 million by 16.96%, and the EPS also surpassed the consensus estimate of $0.37 by 27.03% [1] Revenue Breakdown - Vehicle Control segment generated revenues of $187.42 million, exceeding the two-analyst average estimate of $179.94 million [4] - Temperature Control segment reported revenues of $58.01 million, significantly higher than the two-analyst average estimate of $44.45 million [4] - Engineered Solutions segment achieved revenues of $62.18 million, which fell short of the two-analyst average estimate of $68.94 million [4] Stock Performance - Shares of Standard Motor Products have returned -2.5% over the past month, compared to a -2.2% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Viewpoint - Standard Motor Products (SMP) reported quarterly earnings of $0.47 per share, exceeding the Zacks Consensus Estimate of $0.37 per share, and showing an increase from $0.37 per share a year ago, indicating a strong performance in the auto parts sector [1][2]. Financial Performance - The company achieved revenues of $343.35 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 16.96% and up from $290.76 million in the same quarter last year [2]. - Over the last four quarters, SMP has consistently exceeded consensus EPS estimates, achieving this four times [2]. Stock Performance and Outlook - SMP shares have declined approximately 2.2% since the beginning of the year, contrasting with the S&P 500's gain of 1.3% [3]. - The company's future stock performance will largely depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3][4]. Earnings Estimates - The current consensus EPS estimate for the upcoming quarter is $0.54, with expected revenues of $336.96 million, and for the current fiscal year, the estimate is $3.43 on $1.45 billion in revenues [7]. - The estimate revisions trend for SMP is currently mixed, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6]. Industry Context - The Automotive - Replacement Parts industry, to which SMP belongs, is currently ranked in the top 25% of over 250 Zacks industries, indicating a favorable outlook compared to lower-ranked industries [8].

Financial Performance - Fourth quarter net sales for 2024 were $343.4 million, an increase of 18.1% compared to $290.8 million in the same quarter of 2023[4]. - The acquisition of Nissens contributed $35.7 million in sales during the fourth quarter, with full year net sales reaching $1.46 billion, up 7.8% from $1.36 billion in 2023[4][6]. - Adjusted diluted earnings per share for the fourth quarter were $0.47, up 27.0%, and $3.17 for the full year, an increase of 8.6%[4][6]. - Adjusted EBITDA for the fourth quarter improved to $29.0 million, representing a margin of 8.4%, and full year adjusted EBITDA was 9.6%[11]. - Total revenues for the three months ended December 31, 2024, were $343,352,000, an increase of 18.1% compared to $290,756,000 for the same period in 2023[21]. - Non-GAAP earnings from continuing operations for the three months ended December 31, 2024, were $10,508,000, compared to $8,161,000 for the same period in 2023, reflecting a 28.6% increase[23]. - GAAP operating income for the three months ended December 31, 2024, was $3,880,000, down from $9,947,000 in the same period of 2023[23]. - Non-GAAP diluted earnings per share from continuing operations for the three months ended December 31, 2024, were $0.47, compared to $0.37 for the same period in 2023[23]. - EBITDA without special items for the twelve months ended December 31, 2024, was $140,058,000, compared to $126,667,000 for the same period in 2023[24]. - The percentage of net sales for the consolidated EBITDA without special items was 9.6% for the twelve months ended December 31, 2024, compared to 6.3% in 2023, showing improved profitability[27]. - GAAP earnings from continuing operations before taxes for the twelve months ended December 31, 2024, were $73,989, compared to $81,716 in 2023, indicating a decline[27]. - The company reported a GAAP operating income of $80,624 for the twelve months ended December 31, 2024, compared to $92,677 in 2023, reflecting a decrease[27]. - Interest expense for the twelve months ended December 31, 2024, was $13,512, an increase from $2,521 in 2023, indicating higher borrowing costs[27]. - The company incurred special items totaling $21,144 for the twelve months ended December 31, 2024, which impacted overall financial performance[27]. - Net earnings for the twelve months ended December 31, 2024, were $28,476 thousand, a decrease of 17.1% compared to $34,352 thousand in 2023[30]. Sales and Revenue Segments - Vehicle Control sales increased by 4.9% in the fourth quarter, while Temperature Control sales surged by 30%[7][8]. - Engineered Solutions segment sales declined by 7.9% in the fourth quarter, but the company continues to win new business awards[9]. - Vehicle Control segment revenues for the three months ended December 31, 2024, were $187,418,000, an increase of 4.4% from $178,629,000 in the same period of 2023[21]. - Temperature Control segment revenues for the three months ended December 31, 2024, increased to $58,014,000, up 30.0% from $44,631,000 in the same period of 2023[21]. Expenses and Liabilities - Selling, General & Administrative expenses for the three months ended December 31, 2024, totaled $95,282,000, which is 27.8% of revenues, compared to 24.2% in the same period of 2023[22]. - The company reported acquisition expenses of $12,072,000 for the three months ended December 31, 2024, which negatively impacted GAAP operating income[24]. - The restructuring and integration expenses for the three months ended December 31, 2024, totaled $1,894, compared to $1,259 in the same period of 2023[26]. - Total current liabilities rose to $436,472 thousand in December 2024, compared to $304,263 thousand in December 2023, indicating an increase of 43.5%[29]. - Long-term debt increased to $535,197 thousand in December 2024, up from $151,182 thousand in December 2023, representing a substantial rise of 253.5%[29]. Cash Flow and Assets - Cash and cash equivalents at the end of the period rose to $44,426 thousand, compared to $32,526 thousand at the beginning of the period, marking an increase of 36.5%[30]. - Accounts receivable, net, increased to $210,719 thousand in December 2024 from $160,282 thousand in December 2023, reflecting a growth of 31.4%[29]. - Inventories grew significantly to $624,913 thousand in December 2024, up from $507,075 thousand in December 2023, an increase of 23.2%[29]. - Net cash provided by operating activities decreased to $76,693 thousand in 2024 from $144,260 thousand in 2023, a decline of 46.8%[30]. - The company reported a net cash used in investing activities of $418,683 thousand in 2024, compared to $25,700 thousand in 2023, indicating a significant increase in investment outflows[30]. - The net change in debt for the year was $392,630 thousand, contrasting with a decrease of $83,558 thousand in the previous year, highlighting a shift towards increased borrowing[30]. Future Outlook - The company expects mid-teens sales growth for 2025, largely driven by the Nissens acquisition, with adjusted EBITDA projected between 10.0% and 11.0%[13]. - The integration of Nissens is progressing well, with collaborative efforts underway to identify cost savings and growth opportunities[10]. - Total assets increased to $1,814,126 thousand in December 2024, up from $1,293,047 thousand in December 2023, representing a growth of approximately 40.4%[29].

Core Insights - Standard Motor Products, Inc. reported a strong sales growth in Q4 2024, with net sales reaching $343.4 million, an increase of 18.1% compared to Q4 2023 [3][5][8] - The company experienced a loss from continuing operations of $0.8 million in Q4 2024, contrasting with earnings of $7.2 million in the same quarter of the previous year [3][4] - The acquisition of Nissens Automotive contributed $35.7 million in sales during the two months of ownership in Q4 2024, with overall sales growth of 5.8% excluding this acquisition [5][9] Financial Performance - For the full year 2024, consolidated net sales were $1.46 billion, up 7.8% from $1.36 billion in 2023 [4][8] - Earnings from continuing operations for the full year were $53.6 million or $2.41 per diluted share, down from $63.1 million or $2.85 per diluted share in 2023 [4][10] - Adjusted diluted earnings per share increased by 27% in Q4 and 8.6% for the full year, reaching $0.47 and $3.17 respectively [5][10] Segment Performance - Vehicle Control sales increased by 4.9% in Q4 and 3.3% for the full year, driven by favorable order patterns and strength in non-discretionary categories [5][6] - Temperature Control segment saw a significant sales increase of 30% in Q4 and 12.5% for the full year, indicating robust demand [6][10] - Engineered Solutions segment experienced a 7.9% decline in Q4 sales, although full-year sales were up 1% [7][10] Profitability and Cash Flow - Adjusted EBITDA improved to $29.0 million in Q4 2024, up from $18.3 million in the previous year, with a margin of 8.4% [10] - Total net debt at year-end was $517.9 million, reflecting borrowings related to the Nissens acquisition, with plans to reduce debt levels to below 2.0x by the end of 2026 [11][12] Future Outlook - The company anticipates mid-teens sales growth for 2025, largely due to the Nissens acquisition, with expected Adjusted EBITDA in the range of 10.0-11.0% [12][14] - Integration plans for Nissens are underway, with expectations for cost savings and growth opportunities [9][14] - A quarterly dividend payment of 31 cents per share has been approved, reflecting confidence in future performance [13]