We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is EnerSys (ENS) Up 6.8% Since Last Earnings Report?
Read MoreHide Full Article
It has been about a month since the last earnings report for EnerSys (ENS - Free Report) . Shares have added about 6.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is EnerSys due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
EnerSys 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%.
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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 15.81% due to these changes.
VGM Scores
At this time, EnerSys has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise EnerSys has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is EnerSys (ENS) Up 6.8% Since Last Earnings Report?
It has been about a month since the last earnings report for EnerSys (ENS - Free Report) . Shares have added about 6.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is EnerSys due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
EnerSys Q4 Earnings Surpass Estimates, Revenues Rise Y/Y
EnerSys 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%.
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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 15.81% due to these changes.
VGM Scores
At this time, EnerSys has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise EnerSys has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.