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It has been about a month since the last earnings report for EnerSys (ENS). Shares have lost about 1.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is EnerSys 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 drivers.
EnerSys Q4 Earnings Surpass Estimates, Revenues Miss
EnerSys reported mixed results for the fourth quarter of fiscal 2019 (ended Mar 31, 2019), wherein earnings beat estimates but revenues lagged the same.
The company’s adjusted earnings in the reported quarter were $1.43 per share, beating the Zacks Consensus Estimate of $1.42. Also, the bottom line increased 15.3% from the year-ago figure of $1.24.
For fiscal 2019, EnerSys anticipates adjusted earnings of $4.93 compared with the year-ago figure of $4.65.
Revenues
In the quarter, EnerSys’ net sales were $796.6 million, reflecting growth of 16.6% from the year-ago quarter. The improvement was driven by 20% positive impact of the Alpha acquisition and 1% benefit each from pricing and increase in organic volumes, partially offset by adverse forex woes of 5%. However, the top line lagged the Zacks Consensus Estimate of $816.1 million.
For fiscal 2019, the company generated net sales of $2,808 million, up 9% from the $2,581.8 million reported in fiscal 2018.
Sales generated from the reserve power product line otalled $449 million, increasing 39% year over year while that from motive power declined 3.6% to $347 million.
The company reports net sales under three segments as discussed below:
Revenues from the Americas (representing roughly 63.7% of the quarter’s net sales) were $507.8 million, increasing 33.4% year over year. The improvement was driven by 36% increase from acquired assets and 1% rise from otalled b pricing, partially offset by 2% adverse impact of forex woes and decline in organic volume.
Revenues from the Europe, Middle East and Africa (28.6%) otalled $228 million, flat year over year. Adverse impact of 10% from otalled ble movements in foreign currencies and 1% adverse impact from otalled ble pricing was offset by 11% growth in organic volumes.
Revenues from the Asia (7.6%) were $61 million, down 19%. Decline in organic volume affected results by 14% and forex woes had an adverse 5% impact.
Margins Details
In the quarter under review, EnerSys’ cost of goods sold was $588.2 million. It represented 73.8% of net sales. Gross profit increased 20.8% year over year to $202.3 million, with margin increasing 90 basis points (bps) to 25.4%.