Standard Motor Products, Inc. has recently released its 10-Q report, providing insights into its financial performance for the three months ended March 31, 2025. The company, founded in 1919 and headquartered in Long Island City, New York, operates through four segments: Vehicle Control, Temperature Control, Nissens Automotive, and Engineered Solutions. It manufactures and distributes replacement automotive parts, including ignition, emissions, and fuel delivery systems, electrical switches and actuators, thermal management products, and custom-engineered solutions for various end markets.
In the three months ended March 31, 2025, Standard Motor Products reported consolidated net sales of $413.4 million, representing a significant increase of 24.7% compared to the same period in 2024, when net sales were $331.4 million. The increase in net sales was attributed to several factors, including the inclusion of $66.2 million of net sales from the newly acquired Nissens Automotive segment and strong volume of pre-season customer orders in the Temperature Control operating segment. However, net sales in the Engineered Solutions operating segment decreased due to general softness in end markets.
The gross margin percentage increased to 30.2% in the first quarter of 2025 compared to 27% in the first quarter of 2024. This increase was primarily attributed to higher sales volumes leading to higher fixed manufacturing cost absorption, improved operating performance, and some benefit from movements in foreign currency exchange rates. The operating margin as a percentage of net sales for the three months ended March 31, 2025, increased to 5.9% compared to 4.4% for the same period in 2024.
Standard Motor Products incurred expenses related to its separation program and cost reduction initiative, totaling $0.4 million and $0.3 million, respectively, during the first quarter of 2025. Additionally, the company expanded its cost reduction initiative to encompass the relocation of additional product lines from certain plants in the United States and Canada to existing manufacturing facilities in Mexico.
The company also addressed the impact of United States trade policy, noting new tariffs on imports and the adverse effects on imported raw materials, components, and finished goods. Standard Motor Products stated that it would take actions to optimize its operations to minimize the impact of such tariffs and maintain profitability through cost and pricing measures.
Furthermore, the company emphasized its commitment to sustainability, highlighting its efforts to reduce environmental impact, increase recycling, and develop products that contribute to a greener automotive industry. It also mentioned its dedication to enhancing employee engagement and giving back to communities through its sustainability initiatives.
Today the company's shares have moved 13.3% to a price of $27.59. If you want to know more, read the company's complete 10-Q report here.
