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Dec 31, 2023
EnerSys Q3 2024 Earnings Report
EnerSys reported Q3 2024 results, with a gross margin of 28.9%, up 570 basis points year-over-year, and EPS of $1.86, up 72% year-over-year.
Key Takeaways
EnerSys reported net sales of $862 million, a decrease of 6% year-over-year, primarily driven by temporary spending pauses in telecom and broadband. The company achieved a gross margin of 28.9%, including a $59 million benefit from Inflation Reduction Act / IRC 45X tax credits, and an adjusted EPS of $2.56, up 102% year-over-year. Net leverage was reduced to 1.1x EBITDA on operating cash flow of $135 million.
Net sales were $862M, down 6%, due to temporary spending pauses in telecom and broadband.
Gross margin reached 28.9%, up 570 bps, including a $59M benefit from IRC 45X tax credits.
Operating earnings were $93M, up 18%, and adjusted operating earnings were $130M, up 53%.
Diluted EPS was $1.86, up 72%, and adjusted diluted EPS was $2.56, up 102%.
Revenue by Segment
Forward Guidance
For the fourth quarter of fiscal 2024, EnerSys expects adjusted diluted earnings per share in the range of $1.98 to $2.08, including $0.80 to $0.90 from IRC 45X tax benefits under the IRA, and gross margin in the range of 26.0% to 28.0%, including 350bps to 410bps from IRA credits. Full year capital expenditures are expected to be in the range of $80 million to $100 million.
Positive Outlook
- Ability to maintain pricing.
- Healthy demand trends in the majority of end markets
- Well-positioned to capitalize on market opportunities
- Delivering innovative products aligned with secular trends.
Challenges Ahead
- Temporary spending pauses by telecom and broadband customers.
- IRS has not yet finalized guidance related to section 45X, which could materially increase or decrease the quantity of U.S. produced batteries that qualify for this credit.
- Uncertainty of the occurrence or timing of future excluded items
- difficult to predict
Revenue & Expenses
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Historical Earnings Impact
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Avg. Return Before/After Earnings
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