For the quarter ended September 2024, EnerSys (ENS) reported revenue of $883.7 million, down 1.9% over the same period last year. EPS came in at $2.12, compared to $1.84 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $887.31 million, representing a surprise of -0.41%. The company delivered an EPS surprise of +2.42%, with the consensus EPS estimate being $2.07.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street ...

EnerSys (ENS) came out with quarterly earnings of $2.12 per share, beating the Zacks Consensus Estimate of $2.07 per share. This compares to earnings of $1.84 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 2.42%. A quarter ago, it was expected that this maker of industrial batteries would post earnings of $1.97 per share when it actually produced earnings of $1.98, delivering a surprise of 0.51%.Over the last four quarters, t ...

Acquisition and Investments - The company completed the acquisition of Bren-Tronics Defense LLC for $205.3 million in cash, enhancing its Specialty line of business[149]. - Investing activities used cash of $282.5 million in the six months of fiscal 2025, primarily for the Bren-Tronics acquisition of $205.3 million[210]. Financial Performance - In Q2 fiscal 2025, net sales decreased by $17.3 million or 1.9% compared to Q2 fiscal 2024, driven by a 3% decrease in organic volume and a 1% decrease in pricing, partially offset by a 2% increase from acquisitions[165]. - For the first six months of fiscal 2025, net sales decreased by $73.0 million or 4.0% compared to the same period in fiscal 2024, attributed to a 3% decrease in organic volume and a 1% decrease in pricing[166]. - The Energy Systems segment saw a net sales decline of $40.4 million or 9.6% in Q2 fiscal 2025, primarily due to an 8% decrease in organic volume and a 2% decrease in pricing[167]. - The Motive Power segment experienced a net sales increase of $11.5 million or 3.2% in Q2 fiscal 2025, mainly due to a 3% increase in organic volume[168]. - The Specialty segment's net sales increased by $11.6 million or 9.3% in Q2 fiscal 2025, driven by a 12% increase from acquisitions[169]. - Gross profit increased by $12.5 million or 5.2% in Q2 fiscal 2025, with gross profit margin improving by 190 basis points compared to Q2 fiscal 2024[171]. - Operating earnings increased by $10.8 million or 12.2% in the second quarter of fiscal 2025 compared to the same period in fiscal 2024[191]. - Earnings before income taxes increased by $10.8 million or 14.7% in the second quarter of fiscal 2025 compared to the same quarter in fiscal 2024[201]. Operating Expenses and Charges - Operating expenses increased to $291.7 million in the first six months of fiscal 2025, representing 16.8% of net sales, up from 15.9% in the same period of fiscal 2024[172]. - The company incurred restructuring charges of $0.9 million in Q2 fiscal 2025 related to the Energy Systems segment[174]. - The company plans to cease production of residential renewable energy products, estimating total charges of $24.5 million, primarily non-cash[175]. - The company committed to closing its Spokane facility, estimating total charges of approximately $3.6 million related to employee severance and non-cash charges[176]. - The Company estimates total charges of $13.5 million for the closure of its Sylmar facility, with cash charges of $9.6 million primarily for severance and non-cash charges of $3.9 million related to fixed assets and inventory[178]. - The Ooltewah facility closure is expected to incur total charges of approximately $18.5 million, with cash charges of $9.2 million and non-cash charges of $9.3 million[182]. - The majority of charges related to the Hagen facility closure, estimated at $60.0 million, have been recorded as of January 1, 2023[185]. - The Company recorded cash charges of $1.1 million for site cleanup and $0.2 million for accelerated depreciation during the six months of fiscal 2025[188]. - The Company recorded cash charges of $4.4 million for site cleanup and decommissioning equipment during fiscal 2024[183]. Cash Flow and Liquidity - The company has $408 million in available cash and cash equivalents, along with undrawn committed credit lines of approximately $445 million as of September 29, 2024[158]. - Operating activities provided cash of $44.0 million in the six months of fiscal 2025, a significant decrease from $185.7 million in the same period of fiscal 2024[208]. - Total cash and cash equivalents increased by $74.6 million to $407.9 million in the six months of fiscal 2025[214]. - Financing activities provided cash of $305.3 million in the six months of fiscal 2025, including borrowing $476.6 million under the Second Amended Revolver[212]. Market Conditions and Economic Factors - Global economic conditions are mixed, with elevated interest rates and geopolitical tensions affecting operations in North America, China, and EMEA[150]. - The ongoing Israel-Hamas conflict has disrupted some shipments, leading to potential increases in ocean freight costs and transit times[151]. - Approximately 25% of the company's revenue is now subject to agreements that adjust pricing to a market-based index for lead, with customer pricing changes generally lagging by six to nine months[154]. - The company experienced some price increases in raw materials like copper since the beginning of fiscal year 2025, despite moderation in other materials[154]. - The market demand in the Motive Power segment remains healthy, although there was a decrease in demand in the Class 8 truck market impacting the Specialty segment[151]. Interest and Taxation - Interest expense for the second quarter of fiscal 2025 was $12.5 million, a $0.3 million increase from $12.2 million in the same quarter of fiscal 2024[195]. - Interest expense for the six months of fiscal 2025 was $23.5 million, a decrease of $3.9 million from $27.4 million in the same period of fiscal 2024[196]. - The effective income tax rate for the second quarter of fiscal 2025 was 2.3%, down from 11.2% in the same quarter of fiscal 2024, primarily due to a discrete tax benefit[205]. Foreign Operations and Currency Exposure - Foreign income as a percentage of worldwide income is estimated to be 53% for fiscal 2025, down from 56% for fiscal 2024[206]. - Approximately 40% of sales and related expenses are transacted in foreign currencies, impacting profit margins and competitive position[231]. - The company hedges approximately 5% - 10% of the nominal amount of known annual foreign exchange transactional exposures[233].

Core Insights - EnerSys (ENS) is expected to report quarterly earnings of $2.07 per share, a 12.5% increase year-over-year, while revenues are forecasted at $887.31 million, reflecting a 1.5% decrease compared to the previous year [1] Earnings Estimates - Over the last 30 days, the consensus EPS estimate has been revised downward by 0.3%, indicating a reassessment by analysts [2] - Revisions to earnings estimates are significant indicators for predicting investor actions regarding the stock, with empirical research showing a strong correlation between earnings estimate trends and short-term stock price performance [3] Key Metrics - Analysts project 'Net Sales- Specialty' at $136.79 million, a 10.9% increase year-over-year [5] - 'Net Sales- Motive Power' is expected to reach $369.32 million, indicating a 4% year-over-year increase [5] - The consensus estimate for 'Net Sales- Energy Systems' is $383.28 million, suggesting a 9.3% decrease year-over-year [5] Operating Earnings - The average prediction for 'Operating Earnings- Energy Systems' is $22.92 million, up from $16.80 million in the same quarter last year [6] - 'Operating Earnings- Motive Power' is forecasted at $54.39 million, compared to $49.60 million a year ago [6] - Analysts expect 'Operating Earnings- Specialty' to be $8.44 million, significantly higher than the year-ago figure of $3.30 million [7] Stock Performance - Over the past month, EnerSys shares have declined by 3.5%, while the Zacks S&P 500 composite has decreased by 0.5% [7] - EnerSys holds a Zacks Rank 4 (Sell), suggesting it may underperform the overall market in the near term [7]

The market expects EnerSys (ENS) to deliver a year-over-year increase in earnings on lower revenues when it reports results for the quarter ended September 2024. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates. The earnings report, which is expected to be released on November 6, 2024, might help the stock move higher if these key numbers are ...

Group 1 - EnerSys has consistently surpassed earnings estimates, averaging a 1.74% beat over the last two quarters [1][2] - For the last reported quarter, EnerSys earned $1.98 per share, exceeding the Zacks Consensus Estimate of $1.97 per share by 0.51% [2] - In the previous quarter, the company reported earnings of $2.08 per share against an expectation of $2.02, resulting in a surprise of 2.97% [2] Group 2 - There has been a favorable change in earnings estimates for EnerSys, with a positive Earnings ESP indicating potential for an earnings beat [3][6] - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) suggests a nearly 70% chance of a positive surprise [4][6] - EnerSys currently has an Earnings ESP of +0.48%, reflecting increased analyst optimism regarding its near-term earnings potential [6] Group 3 - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate being more reflective of recent analyst revisions [5] - A negative Earnings ESP can reduce predictive power but does not necessarily indicate an earnings miss [6][7] - It is crucial for investors to check a company's Earnings ESP prior to quarterly releases to enhance the likelihood of successful investment decisions [7]

EnerSys (ENS) stands to benefit from strength across its businesses, strategic acquisitions and a focus on improving the product line and operational excellence. The company remains focused on investing in growth opportunities and strengthening its long-term market position. ENS, which has a market capitalization of $4 billion, currently carries a Zacks Rank #2 (Buy). Let's delve into the factors that have been aiding the firm for a while now. Business Strength: EnerSys has been witnessing strength in its M ...

Market Overview - Investors are preparing for the "September Effect," which historically leads to market volatility [1] - Major indexes showed mixed performance, with the S&P 500 down 0.3% and the Dow Jones Industrial Average down 0.5%, while the Nasdaq Composite gained about 0.3% [1] - The market's uneven behavior reflects concerns about the economy's health [1] Labor Market Data - A report from ADP indicated that only 99,000 private-sector jobs were created in August, significantly below expectations and marking the smallest increase since 2021 [2] - This disappointing labor market data has raised concerns regarding the overall strength of the labor market [2] Federal Reserve Outlook - There is speculation that the Federal Reserve may consider easing its stance on interest rates in the upcoming policy meeting, with many investors anticipating a quarter-percentage-point rate cut [3] - Market sentiment remains fragile as investors await more clarity on monetary policy direction amidst mixed economic signals [3] Investment Strategies - September is characterized by heightened uncertainty, making value stocks a potentially safer investment option [4] - Value investing focuses on selecting fundamentally sound stocks that have been undervalued due to external factors, with the potential for recovery as investors recognize their inherent value [5] Valuation Metrics - The Price to Cash Flow (P/CF) ratio is highlighted as a key metric for assessing a company's financial health, with lower values indicating better performance [6][7] - Positive cash flow is essential for a company's liquidity, enabling it to meet obligations and reinvest in its business [9] Stock Selection Criteria - Parameters for selecting true value stocks include a P/CF ratio less than or equal to the industry median, a minimum stock price of $5, and a significant average trading volume [11][12] - Additional criteria include P/E, P/B, and P/S ratios being less than or equal to the industry median, along with a PEG ratio of less than 1 and a favorable Zacks Rank [10][13][14] Company Highlights - Universal Health Services (UHS) has a Zacks Rank of 1, with a trailing four-quarter earnings surprise of 14.6% and a Value Score of A, with shares up 86.8% in the past year [15][16] - EnerSys (ENS) holds a Zacks Rank of 2, with a trailing four-quarter earnings surprise of 1.5% and shares rising 1.1% in the past year [16] - Kinross Gold Corporation (KGC) also has a Zacks Rank of 2, with a trailing four-quarter earnings surprise of 29.2% and shares advancing 82.9% in the past year [17][18] - Unum Group (UNM) carries a Zacks Rank of 2, with a trailing four-quarter earnings surprise of 3% and shares gaining 15.3% in the past year [18][19]

Core Insights - Investors in the Manufacturing - Electronics sector should consider EnerSys (ENS) and ABB (ABBNY) for potential value opportunities [1] - EnerSys has a stronger earnings outlook compared to ABB, indicated by its Zacks Rank of 2 (Buy) versus ABB's Zacks Rank of 3 (Hold) [3] Valuation Metrics - EnerSys has a forward P/E ratio of 11.03, significantly lower than ABB's forward P/E of 26.15, suggesting better value for ENS [5] - The PEG ratio for EnerSys is 0.61, while ABB's PEG ratio is 2.95, indicating that EnerSys is expected to grow earnings at a more favorable rate relative to its price [5] - EnerSys has a P/B ratio of 2.20 compared to ABB's P/B of 7.97, further supporting the argument that EnerSys is undervalued [6] Value Grades - EnerSys has received a Value grade of A, while ABB has a Value grade of C, reflecting the relative attractiveness of their valuations [6] - Overall, EnerSys is positioned as the superior value option based on its solid earnings outlook and favorable valuation metrics [7]

Core Viewpoint - The Zacks Manufacturing - Electronics industry is expected to grow due to steady demand in electronic services, advanced manufacturing technology adoption, product innovation, and increased e-commerce activities [1]. Industry Overview - The Zacks Manufacturing - Electronics industry includes companies that produce electronic products such as battery chargers, power transmission products, and water-treatment solutions. These firms are investing in innovative technologies and enhancing customer support [3]. Current Trends - **Weakness in Manufacturing Sector**: The manufacturing sector is experiencing persistent weakness, with the Manufacturing Purchasing Manager's Index at 46.8% in July, indicating contraction. The New Orders Index also remains in contraction at 47.4% [4]. - **Strength in Electronics Services Market**: Despite manufacturing slowdowns, demand in key markets remains stable, particularly in medical and life sciences, supported by e-commerce growth [5]. - **Technological Advancements**: Companies are digitizing operations to improve competitiveness, operational productivity, and product quality [6]. Industry Performance - The Zacks Manufacturing - Electronics industry ranks 15, placing it in the top 6% of over 250 Zacks industries, indicating strong near-term prospects [7][8]. - Year-to-date, the industry has gained 8.2%, outperforming the broader sector's 7.9% but lagging behind the S&P 500's 18.1% [9]. Valuation Metrics - The industry is currently trading at a forward 12-month Price-to-Earnings (P/E) ratio of 22.99X, higher than the S&P 500's 21.72X and the sector's 19.16X [10]. Notable Companies - **Powell Industries**: Engaged in custom-engineered equipment, the company has seen a 118.1% share price increase year-to-date, with a Zacks Rank 1 (Strong Buy) [11][12]. - **Eaton Corporation**: A diversified power management company benefiting from improving market conditions and a 23.3% share price increase year-to-date, holding a Zacks Rank 2 (Buy) [13][14]. - **Zurn Elkay Water Solutions**: Focused on water management solutions, the company has gained 9.1% year-to-date and has a Zacks Rank 2 [15][16]. - **EnerSys**: A provider of stored energy solutions, the company has seen a 2% decline year-to-date but rebounded 9.5% in the last six months, also holding a Zacks Rank 2 [17][18].