Enersys' Q3 Earnings Surpass Estimates, Sales Rise Year Over Year

Core Insights - EnerSys reported adjusted earnings of $3.12 per share for Q3 fiscal 2025, exceeding the Zacks Consensus Estimate of $3.03, marking a 22% year-over-year increase [1] - Net sales reached $906.2 million, falling short of the consensus estimate of $935 million, but reflecting a 5.2% year-over-year growth driven by specialty and communications markets [2] Financial Performance - The Energy Systems segment generated sales of $389.2 million, accounting for 42.9% of total sales, up 4.2% year over year, but below the consensus estimate of $409 million [3] - The Motive Power segment's sales were $358.9 million, representing 39.6% of total sales, a 1% year-over-year increase, also missing the consensus estimate of $378 million [4] - The Specialty segment achieved sales of $155.2 million, up 17% year over year, surpassing the consensus estimate of $152 million [5] Margin and Cost Analysis - Cost of sales increased by 4.4% year over year to $533.4 million, while gross profit rose by 19.9% to $298.2 million, resulting in a gross margin increase of 400 basis points to 32.9% [6] - Operating expenses rose by 7.2% to $154.3 million, with operating earnings increasing by 54.1% to $142.7 million, leading to an operating margin increase of 500 basis points to 15.7% [6] Balance Sheet and Cash Flow - As of the end of Q3 fiscal 2025, EnerSys had cash and cash equivalents of $463.2 million, up from $333.3 million at the end of fiscal 2024, while long-term debt increased to $1.27 billion from $802 million [7] - The company generated net cash of $125.1 million from operating activities in the first nine months of fiscal 2025, down from $320.2 million in the prior year, with capital expenditures totaling $90.8 million [8] Guidance - For fiscal 2025, EnerSys expects adjusted earnings to be in the range of $9.97–$10.07 per share, an increase from the previous guidance of $9.65–$9.95, while net sales are now projected to be between $3.603–$3.643 billion, lower than the earlier estimate of $3.675–$3.765 billion [9] - The company anticipates adjusted earnings for the fiscal fourth quarter to be between $2.75–$2.85 per share, with net sales projected in the range of $0.96–$1.0 billion [10]