READING, PA — EnerSys (NYSE: ENS) has announced an upward adjustment in its financial outlook, driven by additional benefits from the Advanced Manufacturing Production Credit under Section 45X of the Internal Revenue Code. Following updates to direct material cost regulations outlined by the U.S. Treasury Department, the company has enhanced its calculations, resulting in an estimated $3 million to $4 million in incremental quarterly tax credits.
To reflect these retroactive benefits, EnerSys plans to record a one-time adjustment of $30 million to $35 million during its fiscal third quarter 2025, covering the period from the inception of the credit in its fiscal fourth quarter 2023. These updates significantly boost the company’s earnings guidance. Adjusted diluted earnings per share (EPS) for the third quarter of fiscal 2025 are now projected between $3.00 and $3.10, compared to the prior guidance of $2.20 to $2.30. Full-year adjusted diluted EPS is expected to range from $9.65 to $9.95, up from the previous estimate of $8.75 to $9.05.
EnerSys anticipates annual tax credits, reducing its cost of goods sold and exempt from taxation, to total approximately $135 million to $175 million—up from the previously announced estimate of $120 million to $160 million. These credits pertain to the company’s qualifying U.S. production volumes and are projected to last through December 31, 2032.
The company expects to see its first cash benefit from these credits by the end of fiscal year 2025, following the completion of its fiscal 2024 tax filings. EnerSys forecasts a positive impact on cash flow as it continues to capitalize on this long-term tax credit program.
Section 45X, created under Section 13502 of the Inflation Reduction Act of 2022 and signed into law on August 16, 2022, offers Advanced Manufacturing Production Credits for U.S.-made battery cells and modules with an energy density of at least 100 watt-hours per liter. Credits are based on sales of qualifying products made in the U.S. from January 1, 2023, to December 31, 2032. Learn more about final regulations for Section 45X at https://www.federalregister.gov/documents/2024/10/28/2024-24840/advanced-manufacturing-production-credit.
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