Energizer Beats EPS, Revs Fall Shy - Analyst Blog
01 Febbraio 2012 - 11:30AM
Zacks
Energizer Holdings Inc.’s (ENR) first quarter
2012 non-GAAP earnings of $2.05 per share not only surpassed the
Zacks Consensus Estimate of $1.91, but also increased 22.0% from
the previous-year quarter.
Revenues
Revenues edged up 1.8% year over year to $1.19 billion, but fell
short of the Zacks Consensus Estimate of $1.24 billion.
Household Products: Household Product, which
comprised 52.9% of total revenue, decreased 5.2% year over year to
$633.7 million, due to shift in timing of holiday deliveries and
de-loading hurricane response inventories. On an organic basis, net
sales declined 5.0% year over year.
Personal Care: Personal Care, which comprised
47.1% of total revenue, increased 11.0% year over year to $564.4
million. The increase was primarily attributable to the ASR
inclusion and favorable currency fluctuations. Organic sales growth
for the quarter was 1.4%.
Wet shave sales (including ASR) climbed 15.2% in the quarter.
Organic sales for the segment grew 2.2% due to higher shipments of
disposables, which was offset by lower sales of legacy men's
products.
Operating Performance
Gross profit increased 1.6% from the prior-year quarter to
$564.5 million. Gross margin of 47.1% was relatively flat on a
year-over-year basis. The gross margin remained flat due to the
impact of a favorable product mix that more than offset the impact
of the low-margin ASR acquisition.
Spending on advertising and promotion (A&P) was down 25.1%
year over year to $96.4 million. Selling, general and
administrative expenses (SG&A) were $214.1 million, up 3.6%
from the year-ago quarter.
The year-on-year increase was primarily led by the ASR and
higher compensation expenses. Research and development expenses
(R&D) was up 9.4% from the prior-year quarter to $25.6
million.
Net income (non-GAAP) increased 14.5% from the year-ago quarter
to $137.1 million. Net margin for the quarter was 11.4% versus
10.2% in the previous-year quarter.
Guidance
For the fiscal 2012, management expects its EPS to be in the
range of $6.00-$6.20. Management believes uncertain economic
conditions in Europe and higher currency fluctuations to act as
headwinds in the near term.
Moreover, management expects advertising and promotional
expenses to increase in the coming two quarters for the promotion
and launch of chick Hydro Silk and Schick Hydro 5 Power Select,
Energizer’s latest offerings from its personal care segment.
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 Panasonic
Corp. (PC) and Procter & Gamble Co.
(PG) will hurt profitability in the near term. Energizer currently
holds a Zacks #3 Rank, implying a short-term Hold rating on the
stock.
ENERGIZER HLDGS (ENR): Free Stock Analysis Report
PANASONIC CORP (PC): Free Stock Analysis Report
PROCTER & GAMBL (PG): Free Stock Analysis Report
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