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Energizer Holdings (ENR) Beats on Q1 Earnings & Revenues

Energizer Holdings, Inc. (ENR) reported first-quarter fiscal 2017 results wherein adjusted earnings of $1.51 per share and revenues of $559.6 million came in way ahead of the Zacks Consensus Estimate of $1.25 and $530million, respectively.

Energizer Holdings Inc. - Earnings Surprise | FindTheBest

On a year-over-year basis, adjusted earnings per share and revenues grew 30.2% and 10.4%, respectively. Moreover, organic revenues increased 7.2% mainly on the back of distribution space gains, better product and price mix and higher sales over the holiday season.

Quarterly Details

Batteries revenues grew 6.3% year over year to $503.1 million while revenues from Other batteries increased 69.7% to $56.5 million.

In North America and Latin America, the company recorded revenues of $365.1 million, up 16.4% from last year's quarter. Revenues from Europe, the Middle East and Africa (EMEA) region were $114.7 million, down 2.7%, while the Asia Pacific region recorded revenue growth of 6.1% year over year to $79.8 million.

Energizer Holdings, Inc. Price, Consensus and EPS Surprise

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

Gross margin in the quarter increased a record 320 basis points (bps) to 48.5%. Selling, general and administrative expenses (excluding spin and acquisition and integration costs) as a percentage of net sales were 14.4% compared with 15.3% reported in the year-ago quarter.

As of Dec 31, 2016, Energizer had cash and cash equivalents of $297.7 million compared with $556.4 million as of Dec 31, 2015. Long-term debt was $981.1 million compared with $981.7 million as of Dec 31, 2015.

Cash flow from operations came in at $91.8 million and free cash flow amounted to $91.2 million in the first quarter.

The company also repurchased shares worth $8.1 million in the first quarter and paid $18 million as dividends.

Guidance

For fiscal 2017, Energizer expects adjusted earnings per share in a band of $2.55 to $2.75 that includes 15 to 20 cents contribution from the auto care business. Moreover, the company expects revenues to be up in mid single digits with 5% - 6% "incremental contribution" from the auto care business despite headwinds from currency fluctuations. Organic revenues are expected to be up in low single digits. Free cash flow is expected to be above $180 million and gross margin is expected to increase 50 to 100 bps. Capex is expected in a range of $30 million - $35 million.

Stiff competition from regional players remains a major concern for Energizer. Moreover, forex volatility will continue to be a headwind for the company, reducing net sales by 1.5% - 2.5%.

Currently, Energizer has a Zacks Rank #3 (Hold). In the last one year, Energizer has generated a positive return of 41.67% compared with the Zacks Consumer Product-Miscellaneous Staples industry's gain of 2.78%.

Better-ranked stocks in the broader tech space include Jabil Circuit Inc. JBL , Oclaro Inc. OCLR and MeetMe, Inc. MEET . While Jabil sports a Zacks Rank #1 (Strong Buy), Oclaro and MeetMe carry a Zacks Rank#2 (Buy) each. You can see the complete list of today's Zacks #1 Rank stocks here.

In the trailing four quarters, Jabil, Oclaro and MeetMe delivered an average positive earnings surprise of 45.61%, 75% and 36.07%, respectively.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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