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EnerSys (ENS) Tops on Q3 Earnings, Expects Q/Q Growth for Q4
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EnerSys (ENS - Free Report) reported better-than-expected results for third-quarter fiscal 2022 (ended Jan 2, 2022). The company’s earnings surpassed the Zacks Consensus Estimate by 2.02% and sales beat the same by 3.74%.
ENS’ earnings in the quarter under review were $1.01 per share, surpassing the Zacks Consensus Estimate of 99 cents. However, the bottom line declined 20.5% from the year-ago figure of $1.27 as higher costs and expenses more than offset the positive impacts of revenue growth.
Revenue Details
In the quarter under review, EnerSys’ revenues were $844 million, reflecting an increase of 12.4% from the year-ago quarter. Organic sales in the quarter grew 10% on the back of strengthening markets. Pricing positively impacted sales by 3% and forex woes left a negative impact of 1%.
On a sequential basis, the company’s revenues increased 6.7%.
Exiting the reported quarter, the company had a backlog of $1.2 billion.
The company’s revenues surpassed the Zacks Consensus Estimate of $814 million.
Geographically, ENS' net sales increased 16% year over year to $578 million in the Americas, while the metric witnessed growth of 5% to $203 million in Europe, Middle East and Africa. Sales in Asia were $63 million, reflecting an increase of 8% from the year-ago quarter.
Its segmental performance for the fiscal third quarter is briefly discussed below:
Energy Systems' sales were $385.2 million, contributing 45.6% to net revenues in the quarter under review. On a year-over-year basis, the segment's revenues increased 14.2%. Volume was up 14% and pricing had a positive impact of 1%. Foreign currency translations hurt by 1%.
The Motive Power segment generated revenues of $339.5 million, contributing 40.2% to net revenues in the reported quarter. The figure increased 11.5% year over year based on 9% growth in volumes and a 5% positive contribution from pricing. Forex woes left a negative impact of 2%.
Specialty's sales were $119.3 million, contributing14.2% to net revenues in the quarter under review. On a year-over-year basis, the segment's revenues increased 8.9%. Volumes grew3% in the quarter, while pricing had positive impacts of 6%.
Margin Profile
In the reported quarter, EnerSys' cost of sales increased 17.4% year over year to $659.7 million. The cost of sales was 78.2% of the quarter's net sales. The gross profit in the quarter decreased 2.6% year over year to $184.3 million, while the gross margin fell 340 basis points (bps) year over year to 21.8%.
Operating expenses increased 10.8% year over year to $130.7 million. It represented 15.5% of net sales in the reported quarter versus 15.7% in the year-ago quarter. Adjusted operating earnings were $60.3 million, reflecting a year-over-year decline of 23.1%. Margin decreased 330 bps year over year to 7.1%.
The company's performance in the quarter suffered from cost inflation and supply-chain constraints. However, pricing actions were a relief.
Balance Sheet and Cash Flow
Exiting the third quarter of fiscal 2022, EnerSys had cash and cash equivalents of $397.1 million, down 2.6% from $407.5 million recorded in the last reported quarter. Long-term debt increased 10.7% sequentially to $1,194.5 million.
In the first three quarters of fiscal 2022, the company repaid a term loan of $161.4 million and revolving credit borrowings of $39.8 million. However, proceeds for revolving credit borrowings were $424.8 million in the first nine months of fiscal 2022.
The company used net cash of $78 million for its operating activities in the first three quarters of fiscal 2022 against net cash generation of $272.1 million in the year-ago period. Capital expenditure totaled $52.4 million compared with $53.7 million in the prior-year period.
EnerSys rewarded shareholders with a dividend payout of $22.2 million in the first three quarters of fiscal 2022. Share repurchased amounted to $114.5 million. The company is left to buyback shares worth $42 million.
Concurrently, EnerSys’ board of directors approved the payment of a quarterly cash dividend of 17.5 cents per share to shareholders of record as of Mar 11, 2022. The disbursement will be made on Mar 25, 2022.
Outlook
EnerSys anticipates gaining from health demand, effective pricing and technological expertise in the quarters ahead. Cost inflation is worrisome. Earnings for the fiscal fourth quarter are expected to be $1.11-$1.21 per share.
With a market capitalization of $3.1 billion, EnerSys currently carries a Zacks Rank #3 (Hold).
Three companies from the Zacks Industrial Products sector to soon report results are discussed below:
Ingersoll Rand Inc. (IR - Free Report) is scheduled to release fourth-quarter2021 results on Feb 23, after market close. It presently carries a Zacks Rank #4 (Sell).
The company reported better-than-expected results in the last four quarters, the earnings surprise being 19.78%, on average. The Zacks Consensus Estimate for Ingersoll’s fourth-quarter earnings has been unchanged in the past 60 days.
Colfax Corporation is slated to release fourth-quarter 2021 results on Feb 22, before market open. It presently carries a Zacks Rank #4 (Sell).
In the last four quarters, the company recorded better-than-expected results thrice and in-line results once. It pulled off a trailing four-quarter earnings surprise of 5.64%, on average. The Zacks Consensus Estimate for CFX’s fourth-quarter earnings has been unchanged in the past 60 days.
Barnes Group Inc. (B - Free Report) presently carries a Zacks Rank #4. The company is slated to report fourth-quarter 2021 results on Feb 18, before market open.
The company reported better-than-expected results in the last four quarters. The earnings beat for the quarters is 10.99%, on average. The Zacks Consensus Estimate for B’s fourth-quarter earnings has decreased 6.1% in the past 60 days.
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EnerSys (ENS) Tops on Q3 Earnings, Expects Q/Q Growth for Q4
EnerSys (ENS - Free Report) reported better-than-expected results for third-quarter fiscal 2022 (ended Jan 2, 2022). The company’s earnings surpassed the Zacks Consensus Estimate by 2.02% and sales beat the same by 3.74%.
ENS’ earnings in the quarter under review were $1.01 per share, surpassing the Zacks Consensus Estimate of 99 cents. However, the bottom line declined 20.5% from the year-ago figure of $1.27 as higher costs and expenses more than offset the positive impacts of revenue growth.
Revenue Details
In the quarter under review, EnerSys’ revenues were $844 million, reflecting an increase of 12.4% from the year-ago quarter. Organic sales in the quarter grew 10% on the back of strengthening markets. Pricing positively impacted sales by 3% and forex woes left a negative impact of 1%.
On a sequential basis, the company’s revenues increased 6.7%.
Exiting the reported quarter, the company had a backlog of $1.2 billion.
The company’s revenues surpassed the Zacks Consensus Estimate of $814 million.
Geographically, ENS' net sales increased 16% year over year to $578 million in the Americas, while the metric witnessed growth of 5% to $203 million in Europe, Middle East and Africa. Sales in Asia were $63 million, reflecting an increase of 8% from the year-ago quarter.
Its segmental performance for the fiscal third quarter is briefly discussed below:
Energy Systems' sales were $385.2 million, contributing 45.6% to net revenues in the quarter under review. On a year-over-year basis, the segment's revenues increased 14.2%. Volume was up 14% and pricing had a positive impact of 1%. Foreign currency translations hurt by 1%.
The Motive Power segment generated revenues of $339.5 million, contributing 40.2% to net revenues in the reported quarter. The figure increased 11.5% year over year based on 9% growth in volumes and a 5% positive contribution from pricing. Forex woes left a negative impact of 2%.
Specialty's sales were $119.3 million, contributing14.2% to net revenues in the quarter under review. On a year-over-year basis, the segment's revenues increased 8.9%. Volumes grew3% in the quarter, while pricing had positive impacts of 6%.
Margin Profile
In the reported quarter, EnerSys' cost of sales increased 17.4% year over year to $659.7 million. The cost of sales was 78.2% of the quarter's net sales. The gross profit in the quarter decreased 2.6% year over year to $184.3 million, while the gross margin fell 340 basis points (bps) year over year to 21.8%.
Operating expenses increased 10.8% year over year to $130.7 million. It represented 15.5% of net sales in the reported quarter versus 15.7% in the year-ago quarter. Adjusted operating earnings were $60.3 million, reflecting a year-over-year decline of 23.1%. Margin decreased 330 bps year over year to 7.1%.
The company's performance in the quarter suffered from cost inflation and supply-chain constraints. However, pricing actions were a relief.
Balance Sheet and Cash Flow
Exiting the third quarter of fiscal 2022, EnerSys had cash and cash equivalents of $397.1 million, down 2.6% from $407.5 million recorded in the last reported quarter. Long-term debt increased 10.7% sequentially to $1,194.5 million.
In the first three quarters of fiscal 2022, the company repaid a term loan of $161.4 million and revolving credit borrowings of $39.8 million. However, proceeds for revolving credit borrowings were $424.8 million in the first nine months of fiscal 2022.
The company used net cash of $78 million for its operating activities in the first three quarters of fiscal 2022 against net cash generation of $272.1 million in the year-ago period. Capital expenditure totaled $52.4 million compared with $53.7 million in the prior-year period.
EnerSys rewarded shareholders with a dividend payout of $22.2 million in the first three quarters of fiscal 2022. Share repurchased amounted to $114.5 million. The company is left to buyback shares worth $42 million.
Concurrently, EnerSys’ board of directors approved the payment of a quarterly cash dividend of 17.5 cents per share to shareholders of record as of Mar 11, 2022. The disbursement will be made on Mar 25, 2022.
Outlook
EnerSys anticipates gaining from health demand, effective pricing and technological expertise in the quarters ahead. Cost inflation is worrisome. Earnings for the fiscal fourth quarter are expected to be $1.11-$1.21 per share.
Enersys Price, Consensus and EPS Surprise
Enersys price-consensus-eps-surprise-chart | Enersys Quote
Zacks Rank & Other Important Earnings Releases
With a market capitalization of $3.1 billion, EnerSys currently carries a Zacks Rank #3 (Hold).
Three companies from the Zacks Industrial Products sector to soon report results are discussed below:
Ingersoll Rand Inc. (IR - Free Report) is scheduled to release fourth-quarter2021 results on Feb 23, after market close. It presently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The company reported better-than-expected results in the last four quarters, the earnings surprise being 19.78%, on average. The Zacks Consensus Estimate for Ingersoll’s fourth-quarter earnings has been unchanged in the past 60 days.
Colfax Corporation is slated to release fourth-quarter 2021 results on Feb 22, before market open. It presently carries a Zacks Rank #4 (Sell).
In the last four quarters, the company recorded better-than-expected results thrice and in-line results once. It pulled off a trailing four-quarter earnings surprise of 5.64%, on average. The Zacks Consensus Estimate for CFX’s fourth-quarter earnings has been unchanged in the past 60 days.
Barnes Group Inc. (B - Free Report) presently carries a Zacks Rank #4. The company is slated to report fourth-quarter 2021 results on Feb 18, before market open.
The company reported better-than-expected results in the last four quarters. The earnings beat for the quarters is 10.99%, on average. The Zacks Consensus Estimate for B’s fourth-quarter earnings has decreased 6.1% in the past 60 days.