Enersys ENS reported third-quarter fiscal 2025 (ended Dec. 31, 2024) adjusted earnings of $3.12 per share, which surpassed the Zacks Consensus Estimate of $3.03. The bottom line increased 22% year over year.
Enersys’ net sales of $906.2 million missed the consensus estimate of $935 million. The top line increased 5.2% year over year, driven by strength in specialty and communications markets. While organic sales increased 2%, acquisitions boosted sales by 3% and pricing had a positive impact of 2%. Foreign currency translation had an adverse impact of 2% on sales.
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Segmental Discussion
The Energy Systems segment’s sales (accounting for 42.9% of total sales) were $389.2 million, up 4.2% year over year. The Zacks Consensus Estimate for segmental net sales was $409 million. Net sales increased due to improved capital spending of telecommunication and broadband customers. While volume increased 6%, forex woes had an adverse impact of 2% on sales.
The Motive Power segment generated net sales of $358.9 million (accounting for 39.6% of total sales), up 1% year over year. The consensus estimate for segmental net sales was $378 million. The upside was driven by a 1% increase in volume and a positive impact of 2% from price/mix. Forex woes had an adverse impact of 2% on sales.
The Specialty segment’s sales were $155.2 million (accounting for 17.1% of total sales), up 17% year over year. The consensus estimate was $152 million. While volume declined 6%, acquisitions and price/mix had positive impacts of 21% and 2%, respectively, on sales.
Enersys Price, Consensus and EPS Surprise
Enersys price-consensus-eps-surprise-chart | Enersys Quote
ENS’ Margin Profile
EnerSys' cost of sales increased 4.4% year over year to $533.4 million. Gross profit increased 19.9% year over year to $298.2 million while the gross margin was up 400 basis points (bps) to 32.9%.
Operating expenses were up 7.2% year over year to $154.3 million. Operating earnings increased 54.1% to $142.7 million. The operating margin increased 500 bps year over year to 15.7%.
Balance Sheet and Cash Flow
At the end of the fiscal third quarter, EnerSys had cash and cash equivalents of $463.2 million compared with $333.3 million at the end of fiscal 2024. Long-term debt (net of unamortized debt issuance costs) was $1.27 billion compared with $802 million at fiscal 2024-end.
EnerSys generated net cash of $125.1 million from operating activities in the fiscal first nine months compared with $320.2 million in the year-ago period. Capital expenditure totaled $90.8 million compared with $59 million in the previous fiscal year’s period.
In the first nine months of fiscal 2025, EnerSys rewarded its shareholders with a dividend payout of approximately $28.1 million, up 10.6% year over year.
ENS’ Guidance
For fiscal 2025, EnerSys expects adjusted earnings to be in the range of $9.97–$10.07 per share compared with $9.65–$9.95 guided earlier. Net sales are now expected to be in the band of $3.603–$3.643 billion, lower than the previous projection of $3.675–$3.765 billion. The company expects capital expenditures to be approximately $120 million. The tax rate is estimated to be in the band of 18–20%.
For the fiscal fourth quarter, the company anticipates adjusted earnings to be in the band of $2.75–$2.85 per share. Net sales are projected to be in the range of $0.96–$1.0 billion.
Zacks Rank and Other Key Picks
ENS currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Here are some other top-ranked stocks:
AZZ Inc. AZZ presently carries a Zacks Rank #2 (Buy). AZZ delivered a trailing four-quarter average earnings surprise of 15.2%.
In the past 60 days, the consensus estimate for AZZ’s fiscal 2024 (ending February 2025) earnings has increased 2.1%.
Markel Group Inc. MKL presently carries a Zacks Rank of 2. MKL delivered a trailing four-quarter average earnings surprise of 35.4%.
In the past 60 days, the consensus estimate for MKL’s 2025 earnings has inched up 0.1%.
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