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 Energizer (ENR) Down 3.6% Since Last Earnings Report?
Read MoreHide Full Article
A month has gone by since the last earnings report for Energizer Holdings (ENR - Free Report) . Shares have lost about 3.6% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Energizer due for a breakout? 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 catalysts.
Energizer Surpasses Earnings & Sales Estimates in Q4
Energizer Holdings reported fourth-quarter fiscal 2018 results, wherein both top and bottom lines came ahead of the Zacks Consensus Estimate. However, revenues tumbled year over year, which along with soft gross margin seem to have weighed on investors’ sentiments.
Q4 Highlights
Adjusted earnings per share (EPS) came in at 83 cents that beat the Zacks Consensus Estimate of 81 cents. Moreover, the figure surged 53.7% from the year-ago quarter driven by reduced promotional activity, SG&A costs and lower tax rate..
Revenues of $457.2 million surpassed the consensus mark of $455.8 million but decreased 1.7% on a year-over-year basis. Notably, this is the fifth straight quarter of a revenue beat. The year-over-year revenue decline was a result of reduced hurricane activity and unfavorable currency impact of 1.2%. Organic sales slipped 0.6%, owing to unfavorable impact from Argentina operations and foreign currency headwinds, partly offset by gains from Nu Finish acquisition.
Quarterly Details
Batteries revenues (89.2% of total revenues) dipped 0.4% year over year to $407.8 million, while revenues from Other segment (11.8%) fell 10.8% to $49.4 million.
In Americas, the company recorded revenues of $297.1 million, down 0.8% from the year-ago quarter. Revenues from International were $160.1 million, down 3.3% from the year-ago quarter.
Margins
Gross margin contracted 50 basis points (bps) to 45.5% due to unfavorable foreign currency translations. Selling, general and administrative expenses, excluding acquisition and integration costs, amounted to $88.1 million, reflecting a decrease of $10.6 million from the year-ago quarter.
Other Financial Details
Energizer ended the quarter with cash and cash equivalents of $522.1 million, long-term debt of $976.1 million and shareholders' equity of $24.5 million.
Year-to-date cash flow from operations were $228.7 million. Free cash flow amounted to $210.6 million and adjusted free cash flow was $237.8 million.
Further, on a year-to-date basis, the company repurchased shares worth $20 million.
Guidance
Management continues to expect earnings per share in the band of $3.40-$3.50 for fiscal 2019. Net sales and Organic revenues are expected to rise low-single digits. Currency headwinds (excluding Argentina) are likely to hurt net sales by 1-1.5%. Nonetheless, net sales growth is expected to gain from Nu Finish’s acquisition to the tune of about 30-40 bps.
However, gross margin excluding acquisition and integration costs is now expected to contract 30-70 bps, owing to unfavorable foreign currency translation. Capex is expected to be $30-$35 million. Adjusted free cash flow is anticipated to remain flat.
Business Developments
The company has announced to acquire Spectrum Brands’ auto care business in a deal worth $1.25 billion. The deal is anticipated to close by second-quarter fiscal 2019. The latter’s auto care brands include Armor All, STP and A/C Pro.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -12.92% due to these changes.
VGM Scores
At this time, Energizer has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. 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. It's no surprise Energizer has a Zacks Rank #4 (Sell). We expect a below 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 Energizer (ENR) Down 3.6% Since Last Earnings Report?
A month has gone by since the last earnings report for Energizer Holdings (ENR - Free Report) . Shares have lost about 3.6% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Energizer due for a breakout? 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 catalysts.
Energizer Surpasses Earnings & Sales Estimates in Q4
Energizer Holdings reported fourth-quarter fiscal 2018 results, wherein both top and bottom lines came ahead of the Zacks Consensus Estimate. However, revenues tumbled year over year, which along with soft gross margin seem to have weighed on investors’ sentiments.
Q4 Highlights
Adjusted earnings per share (EPS) came in at 83 cents that beat the Zacks Consensus Estimate of 81 cents. Moreover, the figure surged 53.7% from the year-ago quarter driven by reduced promotional activity, SG&A costs and lower tax rate..
Revenues of $457.2 million surpassed the consensus mark of $455.8 million but decreased 1.7% on a year-over-year basis. Notably, this is the fifth straight quarter of a revenue beat. The year-over-year revenue decline was a result of reduced hurricane activity and unfavorable currency impact of 1.2%. Organic sales slipped 0.6%, owing to unfavorable impact from Argentina operations and foreign currency headwinds, partly offset by gains from Nu Finish acquisition.
Quarterly Details
Batteries revenues (89.2% of total revenues) dipped 0.4% year over year to $407.8 million, while revenues from Other segment (11.8%) fell 10.8% to $49.4 million.
In Americas, the company recorded revenues of $297.1 million, down 0.8% from the year-ago quarter. Revenues from International were $160.1 million, down 3.3% from the year-ago quarter.
Margins
Gross margin contracted 50 basis points (bps) to 45.5% due to unfavorable foreign currency translations. Selling, general and administrative expenses, excluding acquisition and integration costs, amounted to $88.1 million, reflecting a decrease of $10.6 million from the year-ago quarter.
Other Financial Details
Energizer ended the quarter with cash and cash equivalents of $522.1 million, long-term debt of $976.1 million and shareholders' equity of $24.5 million.
Year-to-date cash flow from operations were $228.7 million. Free cash flow amounted to $210.6 million and adjusted free cash flow was $237.8 million.
Further, on a year-to-date basis, the company repurchased shares worth $20 million.
Guidance
Management continues to expect earnings per share in the band of $3.40-$3.50 for fiscal 2019. Net sales and Organic revenues are expected to rise low-single digits. Currency headwinds (excluding Argentina) are likely to hurt net sales by 1-1.5%. Nonetheless, net sales growth is expected to gain from Nu Finish’s acquisition to the tune of about 30-40 bps.
However, gross margin excluding acquisition and integration costs is now expected to contract 30-70 bps, owing to unfavorable foreign currency translation. Capex is expected to be $30-$35 million. Adjusted free cash flow is anticipated to remain flat.
Business Developments
The company has announced to acquire Spectrum Brands’ auto care business in a deal worth $1.25 billion. The deal is anticipated to close by second-quarter fiscal 2019. The latter’s auto care brands include Armor All, STP and A/C Pro.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -12.92% due to these changes.
VGM Scores
At this time, Energizer has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. 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. It's no surprise Energizer has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.