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Energizer (ENR) Reports Better-Than-Expected Q4 Earnings

Energizer Holdings, Inc. ENR reported strong fiscal fourth-quarter 2017 results. Adjusted earnings of 54 cents per share and revenues of $465.1 million comfortably beat the Zacks Consensus Estimate of 48 cents and $436.4 million, respectively.

The year-over-year revenue growth was boosted by increased organic net sales of 7.5% (including of hurricane volumes). Excluding hurricane volumes, organic revenues rose 3% year over year, added the company.

Quarterly Details

Batteries revenues grew 9.2% year over year to $409.4 million while revenues from Other segment fell 3% to $55.7 million.

Energizer Holdings, Inc. Price, Consensus and EPS Surprise

Energizer Holdings, Inc. Price, Consensus and EPS Surprise | Energizer Holdings, Inc. Quote

In Americas, the company recorded revenues of $299.6 million, up 7.2% from last year’s quarter. Revenues from Europe, the Middle East and Africa region were $92.4 million, up 12.1%. The Asia Pacific region recorded revenue increase of 3.7% year over year to $73.1 million.

Gross margin decreased 270 basis points (bps) to 46%. Selling, general and administrative expenses as a percentage of net sales were 20.7% compared with 21.5% reported in the year-ago quarter.

As of Sep 30, 2017, Energizer had cash and cash equivalents of $378 million compared with $287.3 million as of Sep 30, 2016.  Long-term debt was $978.5 million compared with $981.7 million as of Sep 30, 2016.

For the fiscal ended Sep 30, 2017, cash flow from operations was $197.2 million. Free cash flow amounted to $199.2 million.

As of Sep 30, 2017, the company had repurchased shares worth $58.7 million. Dividend payments in the year were approximately $69.1 million.

Guidance

For fiscal 2018, Energizer now expects earnings per share in the band of $3.00–$3.10.

Organic revenues are expected to be up in low-single digits.  Moreover, favourable forex movements will boost sales of the company by 1%–1.5%.

Gross margin is expected to be flat as increased commodity costs and lithium pricing offset benefits of improved pricing.

Capex is expected in the range of $30–$35 million. Free cash flow is expected to to be in the band of $210 to $220 million.

Zacks Rank & Stock Price Movement

Currently, Energizer carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

In the last year, shares of Energizer have declined 4.1% compared with the S&P 500’s rally of 15.7%.

Other Stocks to Consider

Top-ranked stocks in the broader technology sector include NVIDIA Corporation NVDA Applied Materials AMAT, and Jabil Inc JBL. While Jabil sports a Rank #1, NVIDIA Corp and Applied Materials is a Zacks Rank#2.

Long-term earnings growth rate for NVIDIA, Applied Materials and Jabil is currently projected to be 11.2%, 17.1% and 12%, respectively.

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