EnerSys' Q1 Earnings & Sales Beat Estimates, Increase Year Over Year

Core Insights - EnerSys reported adjusted earnings of $2.08 per share for Q1 fiscal 2026, exceeding the Zacks Consensus Estimate of $2.05, marking a 5% year-over-year increase [1] - The company's net sales reached $893 million, surpassing the consensus estimate of $849 million, with a year-over-year growth of 4.7% driven by data center and communications markets, as well as the Bren-Tronics acquisition [2] Financial Performance - The Energy Systems segment generated sales of $391.4 million, accounting for 43.9% of total sales, reflecting an 8.4% year-over-year increase, outperforming the consensus estimate of $375 million [3] - The Motive Power segment's sales were $349.1 million, representing 39.3% of total sales, down 4.7% year-over-year, with a volume decline of 7% [4] - The Specialty segment reported sales of $148.5 million, accounting for 16.8% of total sales, up 18.1% year-over-year, benefiting from the Bren-Tronics acquisition [5] Margin Analysis - EnerSys' cost of sales increased by 5.7% year-over-year to $566.1 million, while gross profit rose by 6.2% to $253.2 million, resulting in a gross margin increase of 40 basis points to 28.4% [6] - Operating expenses increased by 14% year-over-year to $160.9 million, leading to a 5.3% decrease in operating earnings to $86.5 million, with the operating margin down 100 basis points to 9.7% [6] Balance Sheet and Cash Flow - As of the end of Q1 fiscal 2026, EnerSys had cash and cash equivalents of $346.7 million, slightly up from $343.1 million at the end of fiscal 2025, while long-term debt rose to $1.27 billion from $1.08 billion [7] - The company generated net cash of $1 million from operating activities in the first three months of fiscal 2026, down from $10.4 million in the same period last year, with capital expenditure totaling $33 million [8] Guidance - For Q2 fiscal 2026, EnerSys expects adjusted earnings to be in the range of $2.33 to $2.43 per share, indicating a growth of 26% at the mid-point, with net sales projected between $870 million and $910 million [10][11]