Market Overview

Energizer Beats Q2 Views, Spin-Off On Track


Energizer Holdings, Inc. (NYSE: ENR) swung to a second-quarter net loss on costs for a pending spin-off as well as charges to write off its Venezuela operations, while adjusted profits beat expectations.

Shares of the maker of household batteries and personal care products gained about 1.7 percent recently to $141.59.

Net sales for the personal care products segment, expected to be spun off by July 1, fell 5 percent to $651.1 million. The segment's profit dipped 3.3 percent to $165.1 million.

The household category, which includes batteries, saw second-quarter sales decline 4.4 percent to $356.9 million as profit grew 9.3 percent to $67.9 million.

Results for the recent period included a $144.5 million charge to write off Energizer's investment in Venezuela, and $62.3 million related to a spin-off of Energizer's personal care operations.

The company estimated that total spin-off costs through June 30 will be $350 million to $425 million.

Energizer's inability to exchange Venezuelan currency for dollars have resulted in a lack of control over operations there for accounting purposes and the business there was de-consolidated from Energizer's results as of March 31.

Venezuelan operations are now reported using the cash method of accounting.

Energizer Holdings' total adjusted earnings for the recent second quarter equaled $1.97 a share, compared with Wall Street's expectation of $1.73 a share.

Second-quarter revenue excluding the effects of foreign currency exchange, grew 0.5 percent to $1.01 billion, in line with the consensus view.

Energizer posted a net loss of $88.5 million, or $1.41 a share, compared with year-earlier net profit of $98.5 million, or $1.57 a share.

The company reiterated that it expects household segment sales will be down by a percentage in the low single digits during the nine months ending June 30, but increased its outlook for personal care revenue growth to flat, from a previous forecast of a low single-digit decline.


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