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EnerSys (ENS) Provides Preliminary Results for Fiscal Q4

Zacks Equity Research
·3 min read

EnerSys ENS yesterday discussed preliminary results for fourth-quarter fiscal 2020 (ended March 2020). It noted that measures to contain the coronavirus spread adversely impacted its performances, especially in China, and also disrupted its supply chain.

Presently, the preliminary results do not incorporate the adjustments for claim related to business interruption, impairments and taxations.

It is worth mentioning that the company’s share price decreased 4.9% yesterday, ending the trading session at $48.10.

Inside the Headlines

For fourth-quarter fiscal 2020, EnerSys anticipates revenues of $782 million, suggesting a decline of 3% from the previous projection issued in February 2020. Notably, revenue expectation excludes the impact of movements in foreign currencies.

Gross margin of 25% will likely be at par with the previous expectation, while operating expenses will probably be $5 million short due to lower volumes and cost-saving actions. Losses related to movements in foreign currencies will likely be $1.5 million.

Exiting the year (ended March 2020; results are awaited), the company’s leverage ratio is predicted to be lower than 2.4 and net debt will likely be $0.9 billion. Its cash on hand will likely be $345 million, while liquidity under its revolving credit facility will be $450 million.

Cash flow from operations will likely exceed $75 million in the fourth quarter. EnerSys also noted that it is working on certain cost-saving actions and capital reduction plans. Further, it intends to cut down (by 50%) its capital expenditure of $100 million planned for fiscal 2021 (ending March 2021), while refraining from using its share buyback authorizations for now.

The company expects to witness the pandemic-related uncertainties in the first half of fiscal 2021. However, it might see opportunities from communications, forklift and heavy truck original equipment, and defense customers.

Zacks Rank, Earnings Estimates and Price Performance

EnerSys, with a market capitalization of $2.1 billion, currently carries a Zacks Rank #5 (Strong Sell). In the past three months, the company’s shares have moved down 34.6% compared with the industry’s decline of 29.1%.

The Zacks Consensus Estimate for its earnings per share is pegged at $4.81 for fiscal 2020 and $3.85 for fiscal 2021, reflecting declines of 4.2% and 33.7% from the respective 60-day-ago figures.

Enersys Price and Consensus


Enersys Price and Consensus
Enersys Price and Consensus

Enersys price-consensus-chart | Enersys Quote

Stocks to Consider

Some better-ranked stocks in the Zacks Industrial Products sector are Sharps Compliance Corp. SMED, Tennant Company TNC and CECO Environmental Corp. CECE. While both Sharps Compliance and Tennant currently sport a Zacks Rank #1 (Strong Buy), CECO Environmental carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 30 days, earnings estimates for the companies have been unchanged for the current year. Further, positive earnings surprise for the last reported quarter was 100% for Sharps Compliance, 6.67% for Tennant and 92.86% for CECO Environmental.

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Enersys (ENS) : Free Stock Analysis Report
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