Enersys ENS reported second-quarter fiscal 2025 (ended Sept. 30, 2024) adjusted earnings of $2.12 per share, which surpassed the Zacks Consensus Estimate of $2.07. The bottom line increased 15% year over year.

Enersys’ net sales of $883.7 million missed the consensus estimate of $887 million. The top line declined 1.9% year over year due to headwinds in communications and transportation markets.  Organic sales decreased 3%. While acquisitions boosted sales by 2%, price/mix had an adverse impact of 1%.

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Segmental Discussion

The Energy Systems segment’s sales (accounting for 43.2% of total sales) were $382.1 million, down 9.6% year over year. The Zacks Consensus Estimate for segmental net sales was $383 million.  Net sales decreased due to capital spending pauses of telecommunication and broadband customers. While volume decreased 8%, price/mix had an adverse impact of 2% on sales.

The Motive Power segment generated net sales of $367 million (accounting for 41.5% of total sales), up 3% year over year. The consensus estimate for segmental net sales was $369 million. The upside was driven by a 3% increase in volume.

The Specialty segment’s sales were $135 million (accounting for 15.3% of total sales), up 9% year over year. The consensus estimate was $137 million. While volume declined 4%, acquisitions and price/mix had positive impacts of 12% and 1%, respectively on sales.

Enersys Price, Consensus and EPS Surprise

Enersys price-consensus-eps-surprise-chart | Enersys Quote

ENS’ Margin Profile

EnerSys' cost of sales decreased 3.5% year over year to $553.8 million. Gross profit increased 5.2% year over year to $252.1 million, while the adjusted gross margin was up 210 basis points (bps) to 28.7%.

Operating expenses increased 4.7% year over year to $150.5 million. Operating earnings were up 12.2% to $99.4 million. The operating margin increased 140 bps year over year to 11.2%.

Balance Sheet and Cash Flow

At the end of the fiscal second quarter, EnerSys had cash and cash equivalents of $407.9 million compared with $333.3 million at the end of fiscal 2023. Long-term debt (net of unamortized debt issuance costs) was $1.2 billion compared with $801.9 million at the fiscal 2023-end.

EnerSys generated net cash of $44.1 million from operating activities in the fiscal first six months compared with $185.7 million in the year-ago period. Capital expenditure totaled $66.5 million compared with $35.9 million in the previous year’s period.

In fiscal 2024, EnerSys rewarded its shareholders with a dividend payout of approximately $18.6 million, up 14.1% year over year.