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EnerSys (ENS - Free Report) reported impressive results for fourth-quarter fiscal 2023 (ended Mar 31, 2023). ENS reported adjusted earnings of $1.82 per share, which beat the Zacks Consensus Estimate of $1.38 per share by 31.9% while sales beat the same by 3.9%.
The bottom line increased 51.7% from the year-ago figure of $1.20 per share driven by higher sales generation across all segments.
Revenue Details
EnerSys’ revenues were $989.9 million in the quarter under review, up 9.1% from the year-ago quarter. Organic sales in the quarter grew 4% on the back of strengthening markets. Pricing positively impacted sales by 7% while forex woes left a negative impact of 2%.
ENS revenues beat the Zacks Consensus Estimate of $953 million.
Geographically, ENS' net sales increased 12% year over year to $719 million in the Americas, while the metric witnessed a rise of 5% to $216 million in Europe, the Middle East and Africa. Sales in Asia were $55 million, declining 6% year over year.
Segmental performance for the fiscal fourth quarter is briefly discussed below:
The Energy Systems segment’s sales were $458 million, contributing 46.3% to net revenues in the quarter under review. On a year-over-year basis, the segment's revenues increased 12%. Volume was up 8% while pricing had a positive impact of 6%. Adverse foreign currency translations hurt 2%.
The Motive Power segment generated revenues of $384 million, contributing 38.8% to net revenues in the reported quarter. The figure increased 5% year over year based on an 8% contribution from pricing. Forex woes left a negative impact of 3%.
The Specialty segment’s sales were $148 million, contributing 14.9% to net revenues in the quarter under review. On a year-over-year basis, the segment's revenues increased 12%. Volume and pricing had a positive impact of 6% and 7%, respectively, on the quarter, while foreign currency translations had a negative impact of 1%.
In the reported quarter, EnerSys' cost of sales increased 4.4% year over year to $743.9 million. The cost of sales was 75.1% of the quarter's net sales. The adjusted gross profit in the quarter increased 15.6% year over year to $246.0 million, while the gross margin increased 180 basis points (bps) year over year to 24.9%.
Operating expenses increased 4.1% year over year to $146.1 million. The metric represented 14.8% of net sales in the reported quarter, compared with 15.5% in the year-ago quarter. Adjusted operating earnings were $107.1 million, increasing 40.3% year over year. The margin increased 340 bps year over year to 10.8%.
Balance Sheet and Cash Flow
While exiting the fourth quarter of fiscal 2023, EnerSys had cash and cash equivalents of $346.7 million, down 13.9% from $402.5 million recorded in the fourth quarter of fiscal 2022. Long-term debt decreased 16.2% to $1,042 million from $1,243 million recorded in the fourth quarter of fiscal 2022.
In fiscal 2023, ENS repaid short-term debt of $21.7 million and revolving credit borrowings of $500.5 million. However, proceeds for revolving credit borrowings were $310.5 million in fiscal 2023.
EnerSys generated net cash of $279.9 million for its operating activities in fiscal 2023 against $65.6 million used in the year-ago period. Capital expenditure totaled $88.8 million, compared with $74 million in the previous year’s period.
ENS rewarded its shareholders with a dividend payout of $28.5 million in fiscal 2023. Treasury stock repurchase amounted to $22.9 million.
Dividend
EnerSys’ board of directors approved a quarterly cash dividend of 17.5 cents per share to its shareholders of record as of Jun 16, 2023. The disbursement will be made on Jun 30, 2023.
Outlook
EnerSys anticipates gaining from robust customer demand in diverse end markets. However, forex woes, geopolitical tensions, supply-chain challenges and inflation are worrisome. Earnings for the first quarter of fiscal 2024 are expected to be $1.77-$1.87 per share, inclusive of 40 cents-50 cents per share from IRA benefits. This compares favorably with the year-ago quarter’s figure of $1.15 per share. The gross margin is expected to be in the range of 24.5%-26.5%. For fiscal 2024, capital expenditure is anticipated to be approximately $120 million.
Zacks Rank & Stocks to Consider
ENS currently carries a Zacks Rank #3 (Hold). Some top-ranked companies from the Industrial Products sector are discussed below:
IR delivered a trailing four-quarter earnings surprise of 12.6%, on average. In the past 60 days, estimates for Ingersoll Rand’s 2023 earnings have increased 6%. The stock has improved 7.1% in the past six months.
Alamo Group Inc. (ALG - Free Report) presently sports a Zacks Rank of 1. ALG delivered a trailing four-quarter earnings surprise of 17.7%, on average.
In the past 60 days, estimates for Alamo’s 2023 earnings have increased 12.7%. The stock has gained 19.4% in the past six months.
Axon Enterprise (AXON - Free Report) sports a Zacks Rank of 1. The company has a trailing four-quarter earnings surprise of 44.4%, on average.
In the past 60 days, estimates for Axon’s 2023 earnings have increased 13%. The stock has rallied 4.9% in the past six months.
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EnerSys (ENS) Q4 Earnings Surpass Estimates, Revenues Rise Y/Y
EnerSys (ENS - Free Report) reported impressive results for fourth-quarter fiscal 2023 (ended Mar 31, 2023). ENS reported adjusted earnings of $1.82 per share, which beat the Zacks Consensus Estimate of $1.38 per share by 31.9% while sales beat the same by 3.9%.
The bottom line increased 51.7% from the year-ago figure of $1.20 per share driven by higher sales generation across all segments.
Revenue Details
EnerSys’ revenues were $989.9 million in the quarter under review, up 9.1% from the year-ago quarter. Organic sales in the quarter grew 4% on the back of strengthening markets. Pricing positively impacted sales by 7% while forex woes left a negative impact of 2%.
ENS revenues beat the Zacks Consensus Estimate of $953 million.
Geographically, ENS' net sales increased 12% year over year to $719 million in the Americas, while the metric witnessed a rise of 5% to $216 million in Europe, the Middle East and Africa. Sales in Asia were $55 million, declining 6% year over year.
Segmental performance for the fiscal fourth quarter is briefly discussed below:
The Energy Systems segment’s sales were $458 million, contributing 46.3% to net revenues in the quarter under review. On a year-over-year basis, the segment's revenues increased 12%. Volume was up 8% while pricing had a positive impact of 6%. Adverse foreign currency translations hurt 2%.
The Motive Power segment generated revenues of $384 million, contributing 38.8% to net revenues in the reported quarter. The figure increased 5% year over year based on an 8% contribution from pricing. Forex woes left a negative impact of 3%.
The Specialty segment’s sales were $148 million, contributing 14.9% to net revenues in the quarter under review. On a year-over-year basis, the segment's revenues increased 12%. Volume and pricing had a positive impact of 6% and 7%, respectively, on the quarter, while foreign currency translations had a negative impact of 1%.
Enersys Price, Consensus and EPS Surprise
Enersys price-consensus-eps-surprise-chart | Enersys Quote
Margin Profile
In the reported quarter, EnerSys' cost of sales increased 4.4% year over year to $743.9 million. The cost of sales was 75.1% of the quarter's net sales. The adjusted gross profit in the quarter increased 15.6% year over year to $246.0 million, while the gross margin increased 180 basis points (bps) year over year to 24.9%.
Operating expenses increased 4.1% year over year to $146.1 million. The metric represented 14.8% of net sales in the reported quarter, compared with 15.5% in the year-ago quarter. Adjusted operating earnings were $107.1 million, increasing 40.3% year over year. The margin increased 340 bps year over year to 10.8%.
Balance Sheet and Cash Flow
While exiting the fourth quarter of fiscal 2023, EnerSys had cash and cash equivalents of $346.7 million, down 13.9% from $402.5 million recorded in the fourth quarter of fiscal 2022. Long-term debt decreased 16.2% to $1,042 million from $1,243 million recorded in the fourth quarter of fiscal 2022.
In fiscal 2023, ENS repaid short-term debt of $21.7 million and revolving credit borrowings of $500.5 million. However, proceeds for revolving credit borrowings were $310.5 million in fiscal 2023.
EnerSys generated net cash of $279.9 million for its operating activities in fiscal 2023 against $65.6 million used in the year-ago period. Capital expenditure totaled $88.8 million, compared with $74 million in the previous year’s period.
ENS rewarded its shareholders with a dividend payout of $28.5 million in fiscal 2023. Treasury stock repurchase amounted to $22.9 million.
Dividend
EnerSys’ board of directors approved a quarterly cash dividend of 17.5 cents per share to its shareholders of record as of Jun 16, 2023. The disbursement will be made on Jun 30, 2023.
Outlook
EnerSys anticipates gaining from robust customer demand in diverse end markets. However, forex woes, geopolitical tensions, supply-chain challenges and inflation are worrisome. Earnings for the first quarter of fiscal 2024 are expected to be $1.77-$1.87 per share, inclusive of 40 cents-50 cents per share from IRA benefits. This compares favorably with the year-ago quarter’s figure of $1.15 per share. The gross margin is expected to be in the range of 24.5%-26.5%. For fiscal 2024, capital expenditure is anticipated to be approximately $120 million.
Zacks Rank & Stocks to Consider
ENS currently carries a Zacks Rank #3 (Hold). Some top-ranked companies from the Industrial Products sector are discussed below:
Ingersoll Rand Inc. (IR - Free Report) presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks.
IR delivered a trailing four-quarter earnings surprise of 12.6%, on average. In the past 60 days, estimates for Ingersoll Rand’s 2023 earnings have increased 6%. The stock has improved 7.1% in the past six months.
Alamo Group Inc. (ALG - Free Report) presently sports a Zacks Rank of 1. ALG delivered a trailing four-quarter earnings surprise of 17.7%, on average.
In the past 60 days, estimates for Alamo’s 2023 earnings have increased 12.7%. The stock has gained 19.4% in the past six months.
Axon Enterprise (AXON - Free Report) sports a Zacks Rank of 1. The company has a trailing four-quarter earnings surprise of 44.4%, on average.
In the past 60 days, estimates for Axon’s 2023 earnings have increased 13%. The stock has rallied 4.9% in the past six months.