Energizer Falls Short, Shares Tank
NEW YORK (
) --
Energizer
(ENR) - Get Report
stock has plunged by 11.1% to $65.21 in early-afternoon trading after the company posted earnings that came in below expectations and warned of higher commodity costs ahead.
The company said it expects its businesses to suffer a negative impact of $20 million to $30 million in fiscal 2011 due to rising commodity and raw material costs, particularly with zinc and steel.
Energizer expects to spend about 11.5% to 12% of net sales in advertising and promotion in fiscal 2011.
"Price wars, tight retailer inventories, share gains from private-label competitors and shifting device trends all serve to make the battery category absolutely brutal," has been the bear's view of Energizer leading up to its most recent earnings report, said Morningstar in an analyst report. "Energizer has been smart to diversify its product portfolio, but we don't anticipate a change in fortunes for the category."
The company posted a fourth-quarter net earnings rise of 129% to $84.8 million, or $1.20 a share, from net earnings of $37.1 million, or 53 cents a share last year. Excluding items, earnings were 81 cents a share vs. the 95 cents that analysts predicted.
Net sales fell by about 2% to $1.06 billion from $1.08 billion because of lower net sales at its household products and personal care segments, which were in part hurt by tough economic conditions in Venezuela. Furthermore, "while sales increased from incremental Schick Hydro shipments, this increase was offset by declines in legacy wet shave products and lower sales of shave preparations due to timing," the company said in a press release.
The fourth-quarter consensus estimate for sales was $1.12 billion.
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-- Written by Andrea Tse in New York.
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