NEW YORK - Standard Motor Products, Inc. (NYSE: NYSE:SMP), an established manufacturer and distributor of automotive parts, has announced its financial results for the third quarter ended September 30, 2024. The company has seen a 3.3% increase in net sales to $399.3 million, up from $386.4 million in the same period last year.
The adjusted diluted earnings per share for the quarter rose by 15% to $1.28, indicating a robust performance compared to the previous year. Adjusted EBITDA also saw an improvement, reaching 12.2%, up by 80 basis points.
Sales growth was observed across all three operating segments of the company, with the Vehicle Control segment experiencing a 5.2% increase, the Temperature Control segment growing by 1.9%, and the Engineered Solutions segment nearly 1% up in the quarter.
Standard Motor Products' CEO, Eric Sills, expressed satisfaction with the quarter's results, highlighting the sales increase and earnings performance. He also noted the positive customer demand and market strength, which contributed to the company's growth.
The company has successfully managed its inventory and borrowing levels, with inventory slightly decreasing to $503.0 million from $507.1 million at the year-end, and total debt reducing to $142.8 million at the quarter-end.
In addition, Standard Motor Products is poised to close the acquisition of Nissens Automotive, having received final regulatory approvals. This move is expected to enhance the company's market presence in North America and Europe.
For the full year of 2024, Standard Motor Products anticipates sales growth in the low- to mid-single digits and an Adjusted EBITDA range of 9.0-9.5%. These projections do not account for any potential impact from the Nissens Automotive acquisition.
The Board of Directors has also approved a quarterly dividend of 29 cents per share on the common stock, which will be payable on December 2, 2024, to stockholders of record as of November 15, 2024.
This article is based on a press release statement from Standard Motor Products.
In other recent news, Standard Motor Products (SMP) secured a $750 million credit facility from JPMorgan Chase (NYSE:JPM) Bank and a consortium of lenders. The facility, which includes a $310 million term loan and a $440 million revolving credit line, is set to support the acquisition of Nissens Automotive. The acquisition, scheduled to be completed by the end of the year, is expected to enhance the company's financial agility and bolster growth initiatives.
On the earnings front, SMP recently reported a 10% increase in sales for the second quarter of 2024, hitting a record revenue of $508.2 million. Despite this, the company underscored a need for improved profitability and initiated an early retirement program as a cost-cutting measure. The company's financial outlook for 2024 anticipates low to mid-single-digit percentage sales growth and an adjusted EBITDA of 9% to 9.5%.
Analysts have expressed concerns about the company's profitability despite its sales growth. However, the acquisition of Nissens Automotive is viewed positively, with expectations of growth and cost synergies. These recent developments are part of SMP's efforts to navigate the competitive market and address operational challenges.
InvestingPro Insights
Standard Motor Products' (NYSE: SMP) recent financial results align with several key insights from InvestingPro. The company's 3.3% increase in net sales and 15% rise in adjusted diluted earnings per share reflect its profitability, as highlighted by an InvestingPro Tip indicating that SMP has been profitable over the last twelve months.
The company's strong financial position is further underscored by InvestingPro Data showing a healthy gross profit margin of 28.41% and an operating income margin of 9.76% for the last twelve months as of Q2 2024. These figures support the company's ability to maintain its dividend payments, which it has done for 15 consecutive years according to another InvestingPro Tip.
Despite the positive earnings report, investors should note that SMP's stock has faced challenges recently. An InvestingPro Tip reveals that the stock has fared poorly over the last month, which is corroborated by InvestingPro Data showing a 1-month price total return of -13.67%. This recent performance may present an opportunity for investors, as the current price of $28.66 is significantly below the fair value of $42 based on analyst targets.
For those interested in a deeper analysis, InvestingPro offers 5 additional tips for SMP, providing a more comprehensive view of the company's financial health and market position.
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