Motorcar Parts America (NASDAQ:MPAA) reported 2009 first quarter financial results ended June, exceeding analyst estimates by 67%. The GeoTeam® is speculating that the company may actually be benefiting from the current recession as consumers opt to buy used vehicles or maintain their current vehicles as opposed to purchasing new ones. Motorcar Parts markets its products to the professional repair market and automotive retail outlets.
Comments from the Company's 2009 first quarter press release are encouraging:
"The company experienced a significant pick-up of sales in the third month of the quarter from existing customers that gives us optimism that our base revenue is very strong. Sales in the first month of the current quarter continued to be strong," said Selwyn Joffe, chairman, president and chief executive officer of Motorcar Parts. "The volume of anticipated business from existing and new customers is encouraging. Enhanced utilization of manufacturing capacity and our ability to leverage the company's low-cost manufacturing structure and produce quality products are key components of the company's growth strategy,"
"Industry statistics related to replacement rates for alternators and starters continue to be positive. "With approximately 240 million vehicles currently on the road and 130 million vehicles at least nine years old, we are currently seeing and anticipate improved demand for our products"
Source: GlobeNewswire (August 10, 2009)
We have added the stock to the GeoBargain on the Radar list due to fiscal year 2011 (ending March) analyst estimates of $0.70, showing earnings per share growth of 32%. However, sales growth is forecast to be under 5% and fiscal 2010 non- GAAP earnings per share is expected to stay relatively flat as compared with the prior year. Consequently, it may be a little too early to code Motorcar Parts America as a GeoBargain. We are also considering adding the company to the GeoSpecial list.
More details will be provided if warranted.