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EnerSys (ENS) Up 1.6% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for EnerSys (ENS - Free Report) . Shares have added about 1.6% in that time frame, underperforming 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 the most recent earnings report in order to get a better handle on the important drivers.
Enersys Q3 Earnings Beat Estimates, Revenues Miss
Enersys reported third-quarter fiscal 2024 (ended Dec 31, 2023) adjusted earnings of $2.56 per share, which surpassed the Zacks Consensus Estimate of $2.55. The bottom line surged 102% year over year due to lower sales costs.
Enersys’ total revenues of $861.5 million missed the consensus estimate of $897 million. The top line declined 6.4% year over year due to a 7% decrease in organic sales, which was partially offset by a 1% increase in pricing.
Segmental Discussion
The Energy Systems segment’s sales (accounting for 43.4% of total sales) were $373.5 million, down 14% year over year. This compares with the Zacks Consensus Estimate of $397 million. Segmental revenues decreased due to capital spending pauses of telecommunication and broadband customers. Price/mix had a positive impact of 1%, while organic revenues decreased 15% year over year.
The Motive Power segment generated revenues of $355.4 million (accounting for 41.3% of total sales), down 1.8% year over year. The consensus estimate for segmental revenues was $371 million. The downside was due to a 3% decrease in organic sales, partially offset by a 1% favorable impact from acquisitions.
The Specialty segment’s sales were $132.6 million (accounting for 15.4% of total sales), up 6.8% year over year. The consensus estimate for the same was $133 million. Organic volume increased sales by 6% year over year and foreign currency translation had a positive impact of 1%.
Margin Profile
In the reported quarter, EnerSys' cost of sales decreased 18.2% year over year to $511 million. Gross profit in the quarter increased 16.4% year over year to $248.6 million, while the gross margin increased 760 basis points (bps) to 30.7%.
Operating expenses increased 7.1% year over year to $143.9 million. Adjusted operating earnings surged 53.5% year over year to $130.3 million. The margin increased 590 bps year over year to 15.1%.
Balance Sheet and Cash Flow
At the end of the third quarter of fiscal 2024, EnerSys had cash and cash equivalents of $332.7 million compared with $346.7 million at the end of fiscal 2023. Long-term debt (net of unamortized debt issuance costs) was $880.8 million compared with $1.04 billion at the fiscal 2023 end.
EnerSys generated net cash of $320.2 million from operating activities in the first nine months of fiscal 2024 against $135.8 million in the year-ago period. Capital expenditure totaled $59 million compared with $57.5 million in the previous year’s period.
In the first nine months of fiscal 2024, ENS rewarded its shareholders with a dividend payout of $25.4 million, up 18.7% year over year.
Fiscal Q4 Guidance
For the fourth quarter of fiscal 2024, EnerSys expects adjusted earnings to be $1.98-$2.08 per share. This includes 80-90 cents of IRC 45X tax benefits under the IRA. The gross margin is expected to be in the range of 26-28%. The company expects capital expenditures to be approximately $80-100 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -8.72% due to these changes.
VGM Scores
At this time, EnerSys has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 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 broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, EnerSys has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
EnerSys belongs to the Zacks Manufacturing - Electronics industry. Another stock from the same industry, A.O. Smith (AOS - Free Report) , has gained 8% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
A.O. Smith reported revenues of $988.1 million in the last reported quarter, representing a year-over-year change of +5.6%. EPS of $0.97 for the same period compares with $0.86 a year ago.
A.O. Smith is expected to post earnings of $0.98 per share for the current quarter, representing a year-over-year change of +4.3%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.2%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for A.O. Smith. Also, the stock has a VGM Score of B.
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EnerSys (ENS) Up 1.6% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for EnerSys (ENS - Free Report) . Shares have added about 1.6% in that time frame, underperforming 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 the most recent earnings report in order to get a better handle on the important drivers.
Enersys Q3 Earnings Beat Estimates, Revenues Miss
Enersys reported third-quarter fiscal 2024 (ended Dec 31, 2023) adjusted earnings of $2.56 per share, which surpassed the Zacks Consensus Estimate of $2.55. The bottom line surged 102% year over year due to lower sales costs.
Enersys’ total revenues of $861.5 million missed the consensus estimate of $897 million. The top line declined 6.4% year over year due to a 7% decrease in organic sales, which was partially offset by a 1% increase in pricing.
Segmental Discussion
The Energy Systems segment’s sales (accounting for 43.4% of total sales) were $373.5 million, down 14% year over year. This compares with the Zacks Consensus Estimate of $397 million. Segmental revenues decreased due to capital spending pauses of telecommunication and broadband customers. Price/mix had a positive impact of 1%, while organic revenues decreased 15% year over year.
The Motive Power segment generated revenues of $355.4 million (accounting for 41.3% of total sales), down 1.8% year over year. The consensus estimate for segmental revenues was $371 million. The downside was due to a 3% decrease in organic sales, partially offset by a 1% favorable impact from acquisitions.
The Specialty segment’s sales were $132.6 million (accounting for 15.4% of total sales), up 6.8% year over year. The consensus estimate for the same was $133 million. Organic volume increased sales by 6% year over year and foreign currency translation had a positive impact of 1%.
Margin Profile
In the reported quarter, EnerSys' cost of sales decreased 18.2% year over year to $511 million. Gross profit in the quarter increased 16.4% year over year to $248.6 million, while the gross margin increased 760 basis points (bps) to 30.7%.
Operating expenses increased 7.1% year over year to $143.9 million. Adjusted operating earnings surged 53.5% year over year to $130.3 million. The margin increased 590 bps year over year to 15.1%.
Balance Sheet and Cash Flow
At the end of the third quarter of fiscal 2024, EnerSys had cash and cash equivalents of $332.7 million compared with $346.7 million at the end of fiscal 2023. Long-term debt (net of unamortized debt issuance costs) was $880.8 million compared with $1.04 billion at the fiscal 2023 end.
EnerSys generated net cash of $320.2 million from operating activities in the first nine months of fiscal 2024 against $135.8 million in the year-ago period. Capital expenditure totaled $59 million compared with $57.5 million in the previous year’s period.
In the first nine months of fiscal 2024, ENS rewarded its shareholders with a dividend payout of $25.4 million, up 18.7% year over year.
Fiscal Q4 Guidance
For the fourth quarter of fiscal 2024, EnerSys expects adjusted earnings to be $1.98-$2.08 per share. This includes 80-90 cents of IRC 45X tax benefits under the IRA. The gross margin is expected to be in the range of 26-28%. The company expects capital expenditures to be approximately $80-100 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -8.72% due to these changes.
VGM Scores
At this time, EnerSys has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 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 broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, EnerSys has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
EnerSys belongs to the Zacks Manufacturing - Electronics industry. Another stock from the same industry, A.O. Smith (AOS - Free Report) , has gained 8% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
A.O. Smith reported revenues of $988.1 million in the last reported quarter, representing a year-over-year change of +5.6%. EPS of $0.97 for the same period compares with $0.86 a year ago.
A.O. Smith is expected to post earnings of $0.98 per share for the current quarter, representing a year-over-year change of +4.3%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.2%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for A.O. Smith. Also, the stock has a VGM Score of B.