Motorcar Parts of America, Inc. (MPAA) has increased the ceiling on its share‑repurchase program from $37 million to $57 million, giving the board greater flexibility to buy back shares at prices it deems attractive. The move signals management’s confidence in the company’s cash‑flow generation and its commitment to returning value to shareholders.
MPAA’s most recent quarterly results show a mixed picture. Revenue for the quarter ended September 30 rose 6.4% year‑over‑year to $221.5 million, beating the consensus estimate of $198 million. However, earnings per share fell short of expectations, reporting $0.16 versus the $0.50 consensus—a miss of $0.34 or 68%. The earnings shortfall was driven by higher operating costs, including tariff‑related expenses and one‑time charges, which compressed gross margin from 19.9% to 18.6% in the six‑month period.
The company’s cash‑flow profile remains robust. Net sales for fiscal 2025 reached a record $757.4 million, up 5.5% from the prior year, and the firm reported strong free cash flow that has allowed it to maintain a low net bank debt balance. These financial strengths underpin the decision to expand the buyback program, as the company can afford to return capital to shareholders without compromising its investment in growth initiatives.
By increasing the buyback limit, MPAA positions itself to reduce the number of shares outstanding, which can lift earnings per share and improve return‑on‑equity metrics. The program also provides a flexible tool to take advantage of perceived undervaluation in the market, potentially enhancing shareholder value over the long term.
CEO Selwyn Joffe emphasized that the expanded program is “consistent with management’s commitment to increasing shareholder value—leveraging the company’s financial strength and prominent position within the non‑discretionary automotive aftermarket.” The statement underscores the firm’s confidence in its market position and its willingness to use capital efficiently.
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