Energizer Holdings (ENR) Reports Q3 Earnings

July 30, 2008 8:37 AM EDT

Energizer Holdings, Inc., (NYSE: ENR) reports Q3 EPS of $1.13 (including several items) vs. $1.26 consensus. Revenues were $1.07 billion vs. $1.08 billion consensus.

Looking ahead, retail inventory levels in the U.S. were near seasonally normal levels at quarter end. However, it is unclear whether retailers will stock to normal pre-holiday season levels given the current category sluggishness. Other developed markets are experiencing similar trends. Battery raw material costs, particularly manganese ore, have risen sharply in recent months even as zinc and nickel costs have moderated. At currently prevailing prices, we estimate raw material costs to be $7 to $10 million higher for the fourth quarter versus year ago, and $35 to $40 million higher in fiscal 2009, compared to our estimated costs for fiscal 2008. A 6.5% price increase will be implemented August 15 on alkaline and specialty batteries in the U.S. along with additional price increases in other markets in an effort to maintain profitability levels. In addition, A&P expense will decrease for the September quarter versus the prior year as the timing of advertising and promotion activity in fiscal 2008 was weighted more heavily to earlier quarters as compared to the prior year.[SM]

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