EnerSys (NYSE: ENS) has announced a significant increase in its revenue for the first quarter of fiscal 2026, driven by its recent acquisition of Bren-Tronics, strong demand from data centers, and a recovery in the U.S. communications sector. The company reported revenue of $893 million, reflecting a 4.7% year-over-year increase and exceeding previous guidance. Adjusted diluted earnings per share rose to $2.08, a 5% increase compared to the same period last year.
Despite these positive figures, the company faced challenges with its base business earnings per share, which dropped 6% to $1.11 when excluding tax credit benefits from IRC 45X. This decline was attributed to foreign exchange difficulties and delays in orders related to tariffs in the forklift and transportation markets.
Cost-Cutting Initiatives and Shareholder Returns
In response to ongoing market challenges, President and CEO Shawn O’Connell unveiled a comprehensive cost-reduction strategy called “EnerGize.” This initiative begins with a workforce reduction and an organizational realignment aimed at achieving $80 million in annual savings. O’Connell emphasized that this effort is designed to position EnerSys for long-term growth, stating it is “more than a cost reduction.”
The company is also enhancing its shareholder return strategy, announcing a $1 billion increase in its stock repurchase authorization, bringing the total available buybacks to $1.06 billion. Additionally, EnerSys declared a 9% increase in its dividend to $0.2625 per share, marking the third consecutive annual hike. In the first quarter, EnerSys returned $159.1 million to shareholders, which included $150 million dedicated to buybacks and $9.1 million in dividends.
Outlook and Future Expectations
Looking ahead, EnerSys anticipates net sales ranging from $870 million to $910 million for the second quarter, with adjusted earnings per share projected between $2.33 and $2.43. The company expects to benefit from $35 million to $40 million in IRC 45X advantages. Chief Financial Officer Andrea Funk stated that the first quarter is likely to represent the lowest earnings point for the year, with clearer policy developments expected to stabilize the markets.
While full-year guidance remains suspended pending macroeconomic and policy changes, management is optimistic about adjusted operating earnings growth outpacing revenue growth, driven by operational efficiencies from the EnerGize plan and continued strength in the defense, communications, and data center markets.