EnerSys Misses Sales Range on Currency as Defense Grows

The Tip Desk · November 12, 2026 · 3 min read

Second-quarter fiscal 2027 net sales were $949.9 million, 0.1% below the year-ago quarter and under the $955 million to $995 million range, while adjusted diluted EPS reached $3.22.

EnerSys (ENS), a global leader in stored energy solutions for industrial, infrastructure, and defense applications, reported second-quarter fiscal 2027 net sales of $949.9 million, a 0.1% decline from the year-ago quarter and below the $955 million to $995 million range it had set in August. The company attributed the miss to foreign-currency translation.

Sequential sales rose from $935.6 million in the first quarter, when sales had been up 4.8% year over year. Diluted earnings were $2.42 a share, up 34% from $1.80 a year earlier. Adjusted diluted EPS of $3.22 compared with the $3.15 to $3.25 range given on August 12, 2026. Excluding IRC 45X, adjusted diluted EPS was $2.02.

Gross margin expanded to 29.9%, up 80 basis points from the year-ago second quarter, and 25.2% excluding IRC 45X. Sequentially, the margin compressed from 33.5% in the first quarter. Operating earnings were $115.5 million. Adjusted operating earnings were $152.4 million.

President and Chief Executive Officer Shawn O’Connell said Precision Power Solutions delivered more than 20% year-over-year sales growth, supported by strong demand for soldier power and munitions. Network and Infrastructure Solutions grew 3% against an unusually high second-quarter prior-year comparison, driven by double-digit growth in data centers. Those results, he said, balanced continued pressure in material handling within Industrial Mobility Solutions.

Chief Financial Officer Andrea Funk said improved volumes and favorable price/mix in Precision Power Solutions and Network and Infrastructure Solutions balanced the impact of material-handling softness in Industrial Mobility Solutions. The company said it secured its first order for the DataSafe Noir lithium solution and began generating sales from a second-generation lithium offering for material handling.

On October 27, 2026, EnerSys announced a proposed acquisition of Ultralife to expand differentiated battery technologies and accelerate growth in the defense market. The deal is expected to close in the fourth fiscal quarter of 2027 and remains subject to customary closing conditions, including regulatory approvals. The third-quarter and full-year outlook does not reflect Ultralife or any IEEPA tariff refunds or customer reimbursements.

The company returned $140.3 million to shareholders in the quarter, including $130.0 million of share repurchases covering 679,000 shares and a $0.2875 dividend, versus $77.5 million of total capital returned a year earlier. Cash and cash equivalents were $275.5 million and net debt $554.9 million as of October 4, 2026. The net leverage ratio was 0.8 times EBITDA, down from 1.3 times a year earlier. Operating cash flow was $142.8 million and free cash flow an inflow of $130.4 million, both down from $218.0 million and $197.1 million a year earlier, which the company said was driven by a U.S. federal tax refund received in the prior-year quarter.

For the third quarter of fiscal 2027, EnerSys expects net sales of $935 million to $975 million and adjusted diluted EPS of $3.05 to $3.15, inclusive of IRC 45X. Full-year capital expenditures are expected at about $70 million. Funk said the outlook reflects continued strength across Aerospace and Defense, Data Centers, and Transportation, with Communications picking up and Material Handling showing early recovery that should transform Industrial Mobility Solutions revenue to year-on-year growth. She said Industrial Mobility Solutions is expected to see margin pressure as Transportation outpaces higher-margin Material Handling growth, and that Precision Power Solutions and Network and Infrastructure Solutions face tough comps after exceptionally strong margins in the prior year and prior quarter.

The board approved a quarterly cash dividend of $0.2875 a share, payable December 31, 2026, to holders of record as of December 18, 2026.