EnerSys (NYSE: ENS) has reported a notable increase in first-quarter revenue for fiscal year 2026, driven by the acquisition of Bren-Tronics and strong demand in data centers, along with a recovery in the U.S. communications sector. The company’s revenue reached $893 million, reflecting a 4.7% rise year-over-year, surpassing initial guidance. Despite this growth, adjusted diluted earnings per share rose only slightly to $2.08, a 5% increase from the previous year. However, base business earnings per share, which exclude tax credit benefits from IRC 45X, fell by 6% to $1.11 due to challenges such as foreign exchange fluctuations and delays in tariff-related orders in the forklift and transportation markets.
In response to these developments, President and CEO Shawn O’Connell introduced the “EnerGize” strategic framework, aimed at enhancing operational efficiency and adaptability. This initiative includes a workforce reduction and organizational restructuring, which is projected to yield annual savings of $80 million. O’Connell emphasized that this plan is focused on long-term growth and is “more than a cost reduction.”
Increased Shareholder Returns and Future Outlook
EnerSys has also expanded its commitment to returning capital to shareholders, announcing an increase of $1 billion to its stock repurchase authorization, raising the total buybacks available to $1.06 billion. Additionally, the company declared a 9% increase in its dividend, now set at $0.2625 per share, marking the third consecutive annual hike. In the first quarter, EnerSys returned $159.1 million to shareholders, consisting of $150 million in stock buybacks and $9.1 million in dividends.
As of the end of the first quarter, EnerSys reported liquidity of $346.7 million in cash and a net leverage ratio of 1.6x, an increase from 1.1x the previous year, largely due to the Bren-Tronics acquisition and stock repurchases.
Looking ahead to the second quarter, EnerSys anticipates net sales between $870 million and $910 million, alongside adjusted earnings per share projected between $2.33 and $2.43. The company expects to realize benefits from IRC 45X in the range of $35 million to $40 million. Chief Financial Officer Andrea Funk mentioned that the first quarter is likely to represent the low point for earnings this year, with expectations for improved market stability due to clearer policy direction.
While the company has not provided full-year guidance due to ongoing macroeconomic factors, management remains optimistic that adjusted operating earnings growth, excluding benefits from 45X, will outpace revenue growth. This is supported by operational efficiencies from the EnerGize initiative, as well as strength in the defense, communications, and data center markets.
