EnerSys' Q3 Earnings Beat Estimates, Decrease Year Over Year

Core Insights - EnerSys (ENS) reported adjusted earnings of $2.77 per share for Q3 fiscal 2026, exceeding the Zacks Consensus Estimate of $2.73, although this represents an 11% decline year over year [1][10] - Net sales reached $919.1 million, falling short of the consensus estimate of $932 million, but showing a 1% increase year over year, driven by a 3% positive impact from pricing and a 2% benefit from foreign currency translation, offset by a 4% decline in organic volume [2][10] Segmental Discussion - The Energy Systems segment, accounting for 43.5% of total sales, generated $399.5 million, a 2.6% increase year over year, but below the consensus estimate of $408 million, with a 3% decline in volume offset by a 4% positive impact from price/mix and a 2% from foreign currency translation [3] - The Motive Power segment reported net sales of $352.1 million, down 1.9% year over year and below the consensus estimate of $362 million, with a 7% decline in volume, although foreign currency translation positively impacted sales by 3% [4] - The Specialty segment's sales were $168 million, up 8% year over year and above the consensus estimate of $166 million, benefiting from transportation aftermarket growth, with volume increasing by 2% and price/mix contributing 4% [5] Margin Profile - EnerSys' cost of sales increased by 6.4% year over year to $567.3 million, leading to a gross profit decrease of 7.3% to $276.3 million, with the gross margin down 280 basis points to 30.1% [6] - Operating expenses decreased by 4.2% year over year to $147.8 million, while operating earnings fell by 12.9% to $124.2 million, resulting in an operating margin decrease of 220 basis points to 13.5% [6] Balance Sheet and Cash Flow - As of the end of Q3 fiscal 2026, EnerSys had cash and cash equivalents of $450.1 million, up from $343.1 million at the end of fiscal 2025, while long-term debt increased to $1.15 billion from $1.08 billion [7] - The company generated net cash of $403.6 million from operating activities in the first nine months of fiscal 2026, compared to $125.1 million in the same period last year, with capital expenditure totaling $67.3 million [8] Guidance - For Q4 fiscal 2026, EnerSys expects adjusted earnings to be in the range of $2.95–$3.05 per share, indicating a growth of 4% at the mid-point, with net sales projected between $960 million and $1,000 million, also implying a 4% growth at the mid-point [11]