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Energizer Off as Results Hit by Health Costs Due to Pandemic

Energizer swung to a fiscal-fourth-quarter loss as it spent $36 million on coronavirus mitigation measures.
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Shares of Energizer Holdings  (ENR) - Get Energizer Holdings, Inc. Report dropped on Thursday after the battery maker  reported a fiscal-fourth-quarter loss and adjusted earnings that missed analysts' expectations. 

The St. Louis company swung to a GAAP net loss of 81 cents a share against profit of 61 cents in the year-earlier period. Energizer reported adjusted earnings of 59 cents a share, short of the consensus analyst estimate of 81 cents a share in a survey compiled by FactSet. 

Revenue for the period rose 6.1% to $763 million, which topped the FactSet estimate of $742.2 million. 

"The continued elevated demand for batteries and the recovery of the auto care business resulted in our fifth consecutive year of organic growth," Chief Executive Alan Hoskins said in a statement.

But earnings were hurt as the company spent to ensure the health and safety of its employees. 

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All told, Energizer said that it had $36 million of costs related to Covid-19, reducing earnings per share by 41 cents. 

"We have taken action to increase our agility and ability to serve our customers. We expect the increased costs related to covid-19 will be substantially reduced by the end of the first quarter of fiscal 2021," Hoskins said. 

Energizer's gross margin narrowed to 36.9% from 40% in the year-earlier quarter. For the year, the margin shrank to 39.4% from 40.2% in fiscal 2019.

For fiscal 2021 Energizer is estimating adjusted earnings per share of $2.95 to $3.25. The FactSet survey calls for $3.14 a share.

And the board authorized a new share buyback of as many as 7.5 million shares. 

Energizer shares at last check were off 13% to $41.08.