An unexpected winner in Wednesday’s markets was a well-known retail battery maker. Manufacturer of the iconic Energizer batteries, Energizer Holdings (NYSE: ENR), shot up big time when it reported some highly impressive financial figures. Not only did the company more than beat Wall Street expectations, but a recent acquisition ended up resulting in hundreds of millions of dollars in extra revenue for this quarter.
Energizer’s net sales came in at $719 million for Q4, which is a 57.3% increase from last year. While a fair bit of this increase was due to its acquisition of Spectrum Brands Holdings, a battery and portable lighting company which bought a large number of energizer batteries for its own business, organic sales growth was still at a highly commendable 9.2%. Breaking it down even further, organic sales were up 8% in the North American market, while overseas sales had gone up by 13%.
As for profits, Energizer reported $46.2 million in net income, once again a drastic increase from the $1.5 million profit seen from the same time last year. Again, much of this was due to Energizer’s Spectrum acquisition, but the company would have been profitable even without this one-time surge in sales.
“Fiscal 2019 was an important year in transforming Energizer into a diversified household products leader in Battery, Lights and Auto Care which will create significant value for our shareholders,” said Alan Hoskins, CEO of Energizer. “Our organization did a terrific job achieving our full year financial objectives while making tremendous progress integrating the acquired battery and auto care businesses. Looking forward to fiscal year 2020, we expect a fifth consecutive year of organic revenue growth and a significant increase in our adjusted EBITDA and free cash flow, allowing us to continue investing in our business and reduce debt.”
For the past while now, investors have been worried about the state of Energizer’s iconic battery business, especially in light of increased competition from other retailers that are making their own battery products. However, Energizer’s management team ended up brushing off these concerns, arguing that their branding was strong enough to carry the company forward.
Shares of Energizer shot up 15.2% in response to the news, reaching a high point for 2019. The company’s stock has had an erratic history for the most part, with the past year and a half seeing Energizer’s shares fall by as much as half. At the moment, however, the vast majority of analysts covering the stock are optimistic about its prospects. Out of 12 listed analysts, 9 of them have “buy” ratings, while just one has a “hold” and one has a “sell” rating.
Energizer Holdings Company Profile
Energizer Holdings Inc makes and distributes household batteries, specialty batteries, and lighting products. Energizer offers batteries using lithium, alkaline, carbon zinc, nickel metal hydride, zinc air, and silver oxide technologies. These products are sold under the Energizer and Eveready brands, at performance and premium price segments. Roughly half of the firm’s revenue is generated in North America, and the rest comes from Latin America, Europe, the Middle East, Africa, and Asia-Pacific. – Warrior Trading News
