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EnerSys Announces Preliminary Q4 Results & Quarterly Dividend

Zacks

EnerSys ENS recently announced preliminary numbers for the fourth quarter of fiscal 2019 (ended Mar 31, 2019). The company is slated to release the final results on May 30.

For the fiscal fourth quarter, the company expects adjusted earnings of $1.43 per share compared with $1.41-$1.45, projected earlier. The figure compares favorably with $1.24 reported in the year-ago quarter. The Zacks Consensus Estimate for the quarter is pegged at $1.42.

For fiscal 2019, EnerSys anticipates adjusted earnings of $4.93 compared with the year-ago figure of $4.65.

Revenues


EnerSys’ net sales are expected to be $796.6 million, reflecting growth of 17% from the year-ago reported figure. The improvement is likely to be 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%. The Zacks Consensus Estimate for revenues is pegged at $816.1 million.

For fiscal 2019, the company anticipates net sales of $2,808 million, up 9% from the $2,581.8 million reported in fiscal 2018.

In addition, the company’s board of directors declared a quarterly dividend of 17.5 cents per share to shareholders of record as on Jun 14, 2019. The dividend will be paid on Jun 28, 2019.

Our Take

EnerSys has been gaining from its solid product portfolio, favorable pricing and higher sales from major businesses (like motive power). Also, the company has taken steps to strengthen American and Asian operations, and reserve power business in Europe, the Middle East and Africa. These restructuring actions are likely to benefit its operational performance in the upcoming quarters.

Moreover, the buyout of Alpha Technologies Group of Companies (completed in December 2018) will enhance the company's product portfolio across the telecom, broadband, industrial and renewable markets.

However, over the past month, this Zacks Rank #3 (Hold) stock has declined 13.5% compared with industry’s fall of 8.5%. Rising cost of sales has been a major concern for EnerSys over the past several quarters. In the third quarter of fiscal 2019, the company’s cost of sales increased 4.8% on a year-over-year basis despite cost-reduction initiatives. Escalating costs may continue affecting its margins in the upcoming quarters.

Key Picks

Some better-ranked stocks in the same space are iRobot Corp. IRBT, DXP Enterprises, Inc. DXPE and Dover Corp. DOV. While iRobot sports a Zacks Rank #1 (Strong Buy), DXP Enterprises and Dover carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

iRobot surpassed estimates in each of the trailing four quarters, the average being 94.52%.

DXP Enterprises exceeded estimates thrice in the trailing four quarters, the average being 48.47%.

Dover surpassed estimates in each of the trailing four quarters, the average being 8.61%.

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