EnerSys’ Q1 Earnings and Revenues Miss Estimates, Up Y/Y

EnerSys Inc. (ENS) recently reported first-quarter 2015 financial numbers with earnings of $1.02 a share comparing unfavourably with the Zacks Consensus Estimate of $1.06. However, quarterly earnings were up 22.9% year over year, primarily driven by strong order intake and robust backlog.

Total revenue for the first quarter came in at $634.1 million reflecting a 6% year over year increase from $597.3 million reported in the prior-year quarter. The increase in revenue was mainly driven by accretive acquisitions. However, the revenue figure lagged the Zacks Consensus Estimate of $663 million.

However, on a sequential basis, revenues declined 5% to $634.1 million from $665.2 million. The decline can be attributed to reduced organic volumes.

Segment Wise

Revenues at the Americas segment came in at $330.9 million, up 4.9% year over year while operating earnings were almost flat at $41.5 million.

Revenues in the EMEA segment grew 4.8% year over year to $242 million while operating earnings for the segment grew 77.6% to $28.6 million in the quarter under review.

The Asia segment’s reported revenues grew 20.7% year over year to $61.2 million while operating earnings at the business improved 30.8% to $3.6 million.

Margins

Gross profit for the quarter stood at $162.6 million versus $140.1 million in the prior-year quarter, while gross margin expanded 218 basis points (bps) to 25.6%. Meanwhile, the operating margin for the quarter rose 83 bps to 11.3%.

Outlook

Concurrent with the earnings release, management provided guidance for the second quarter of 2015. EnerSys expects non-GAAP earnings per share in the band of $1.00–$1.04. This guidance excludes an expected net charge of 8 cents from ongoing restructuring programs and acquisition expenses.

Other Stocks to Consider

EnerSys currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include Powell Industries (POWL), AO Smith (AOS) and Ingersoll Rand (IR). All three carry a Zacks Rank #2 (Buy).

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