Energizer Holdings Inc.
) second quarter 2012 non-GAAP earnings of $1.22 per share not only
surpassed the Zacks Consensus Estimate of $1.09, but also increased
17.3% from the previous-year quarter.
Total revenue increased 6.4% year over year to $1.10 billion and
beat the Zacks Consensus Estimate of $1.04 billion. The upside was
primarily attributed to the organic growth in the personal care and
household products segment. Overall, the company recorded 6.8%
organic growth in the reported quarter.
Personal Care, which comprised 59.1% of total revenue, increased
6.7% year over year to $651.5 million, primarily on the back of
robust sales in the Wet Shave and Skin Care segments. Organic sales
growth for the quarter was 6.9%. Household Products, which
comprised 40.9% of total revenue, increased 6.0% year over year to
$450.3 million, primarily due to price increase in the US. On an
organic basis, net sales increased 6.8% year over year.
Gross profit increased 9.8% from the prior-year quarter to
$517.2 million. Gross margin expanded 140 basis points on a
year-over-year basis to 46.9%. The gross margin was positively
impacted by favorable product mix and lower trade spending on
Spending on advertising and promotion (A&P) was up 11.3%
year over year to $111.7 million. Selling, general and
administrative expenses (SG&A) were $232.2 million, up 7.1%
from the year-ago quarter. Research and development expenses
(R&D) went up 5.3% from the prior-year quarter to $27.7
Total operating profit increased 12.5% from the previous-year
quarter to $197.4 million. Operating margin increased 90 bps to
17.9%, compared with 17.0% in the previous-year quarter due to
Net income (non-GAAP) increased 9.8% from the year-ago quarter
to $80.8 million. Net margin for the quarter was 7.3%, versus 7.1%
in the previous-year quarter.
For fiscal 2012, management expects its EPS to be in the range
of $6.00-$6.20. The Zacks Consensus Estimate of $6.10 for fiscal
2012 lies at the mid-point of management guidance. Further,
management expects advertising and promotional expenses to increase
in the coming two quarters for the promotion and launch of Hydro
We have a Neutral recommendation on Energizer over the long term
(6-12 months). However, we believe higher commodity costs coupled
with intense competition from companies such as
Procter & Gamble Co.
) will hurt profitability in the near term. Energizer currently
holds a Zacks #4 Rank, implying a short-term Sell rating on the
ENERGIZER HLDGS (ENR): Free Stock Analysis
PANASONIC CORP (PC): Free Stock Analysis Report
PROCTER & GAMBL (PG): Free Stock Analysis
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