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EnerSys’ shares have yielded a negative return over the past six months, comparing unfavorably to the Zacks categorized Machinery-Electrical industry’s average positive return. Of late, volatility in cost of commodities (especially lead) has weighed upon the company’s profitability. To combat the lead price rise, EnerSys has already initiated price increases, but the desired effects are taking longer than anticipated to take hold, thus adding to woes. In light of sharply rising led cost, customers are placing more orders at old price levels. In addition, currency fluctuations and stiff competition in the industry are also eroding the company’s profits substantially. Despite these challenges, EnerSys’ recent operating results have been strong, driven by lower manufacturing costs, improved pricing and mix, and a lower tax rate.

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