Energizer (ENR) Rockets After Announcing Workforce Reduction Plan

Shares of battery and personal care giant Energizer Holdings Inc. (ENR: Charts, News) closed up +7.30 points or +10.75 percent to $75.22 per share on Tuesday, after the company announced it would be reducing its global workforce to increase competitiveness in the world market.

The move could potentially save Energizer Holdings $175 to $200 million per year, according to the company. The changes the company plans are not limited to cutting the workforce, but also, for the company to save on other costs such as overhead and procurement. In addition, the plan includes changes in marketing strategy. Energizer's board has yet to approve the plan. Daily Chart
Town and Country, Missouri based Energizer Holdings, originally the Eveready Battery Company, was bought by food manufacturer Ralston Purina in 1986 and subsequently spun off and listed on the New York Stock Exchange as Energizer Holdings in 2000. Energizer Holdings then acquired a number of personal care product manufacturers beginning in 2003, with its takeover of Schick and Wilkinson Sword razor blades from Pfizer (PFE: Charts, News). The company continued expanding by acquiring Playtex Products in 2007, with more recent acquisitions including Edge shaving cream and American Safety Razor. The company reaffirmed its outlook for diluted earnings per share for fiscal 2012 to be $6.00 to $6.20 per share. The analyst consensus for yearly earnings for fiscal 2012 was $5.97 per share. Furthermore, Energizer stated that earnings for the period ending September 30th would be higher than the same period one year ago. Energizer's initial outlook for fiscal 2013, as well as the timing of costs and savings for the initiatives to improve competitiveness will be disclosed at the company's fiscal year-end earnings release and conference call on November 9, 2012. After the announcement, Ward Klein, Chief Executive Officer of Energizer stated that "While the detailed work continues, we believe the preliminary assessment has identified the actions needed to support our long-term strategy to maximize cash flow in Household Products, support growth in Personal Care and drive shareholder value," he continued, "We believe these initiatives will deliver substantial value for shareholders, and we will pursue these initiatives with urgency and focus, while establishing a framework to provide transparency and accountability. We are committed to improving our cost structure and operational performance while increasing our investments in brand building, innovation and category development. On August 1st, Energizer Holdings Inc. reported fiscal net earnings of $70.3 million, a seven percent improvement over the previous year's third quarter. Nevertheless, revenue fell nine percent to $1.1 billion compared with the third quarter of 2011 due in large part to overseas currency losses in Europe and Latin America. News of the changes to its operating model and the improved guidance for year-end earnings were well received by investors, pushing the company's stock up ten percent on Tuesday. Whether Energizer stock can continue performing until November's earnings release may be a function of overall market activity, since the stock closely tracks the market as a whole with a beta of 0.91. Some analysts have a target for Energizer stock of $83 per share, which seems more likely given Tuesday's move. An earnings surprise in November could also give Energizer Holdings stock a boost, in addition to the savings from changes in its operating model. Other News About ENR Energizer First to Introduce Safe New Child-Resistant Packaging for Coin Lithium Batteries Energizer takes steps to reduce the incidence of the ingestion of coin lithium batteries by children. Energizer Taps Serengeti to Provide Legal Software Company signs deal with division of Thomson-Reuters. Other Stocks in the News Oracle May Show Gains in Cloudy Market Company may report small gain in earnings on Thursday. Samsung Fails to Defeat Galaxy Tab Sale Ban in Apple Case Samsung fails to convince U.S. judge to lift ban on Galaxy Tab sales. Copyright 2012 by InvestorGuide.com, Inc. InvestorGuide has no control over the sites we link to, is not affiliated with these sites, and cannot take responsibility for their quality or suitability. The news, analysis, commentary and profile information is not meant to be comprehensive, and the data provided is not guaranteed to be accurate. WebFinance Inc., the publisher of this newsletter, is not a registered investment advisor or a broker/dealer. This is not a stock recommendation newsletter but rather a source for investment ideas, and we encourage you to fully research any company before considering investing. The opinions expressed herein are those of the author and do not necessarily represent the views of nor are they endorsed by WebFinance Inc. No employee of WebFinance has owned or currently owns any shares in the company described above. The above is neither an offer nor solicitation to buy or sell any securities. The trading of securities may not be suitable for all potential readers of this newsletter, and the purchase of stocks mentioned in this newsletter may result in the loss of some or all of any investment made. We recommend that you consult a stockbroker or financial advisor before buying or selling securities or making investment decisions. We are not responsible for claims made by advertisers and sponsors. Anyone who makes decisions based on what they read here does so at their own risk and cannot hold WebFinance Inc. (DBA InvestorGuide.com, Inc.) or its employees responsible.

Published on Sep 19, 2012
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

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