Jefferies LLC has lowered its second-quarter 2019 sales and earnings per share (EPS) forecast for Standard Motor Products (SMP), citing expected softer A/C business tied to a lack of meaningfully warm weather versus record prior-year heat.
Jefferies analysts now expect SMP’s second quarter sales to come in around $300 million — down from $309 million. The consensus of analyst estimates calls for $305 million in sales for the quarter. Jefferies also forecasts SMP’s quarterly EPS to be $0.80 — down from $0.84, with a consensus estimate of $0.83.
“We believe that a lack of meaningfully warmer weather year-over-year likely weighed on temperature control demand and expect Q2 retailer commentary around product trends to highlight A/C-related products as particularly weak in April/May, with improvement seen in June and July month-to-date,” analysts Bret Jordan, Mark Jordan and Ethan Huntley wrote in a July 17 estimate change note.
They added: “We remain optimistic that Q3 quarter results may offset Q2 weakness, as a significant warm up in June and July appears to be driving A/C demand recovery that could still result in mid-season re-stocking at retail.”