What happened

Shares of battery manufacturer Energizer Holdings (NYSE:ENR) short-circuited in early Thursday trading, dropping 11.1% through 10:40 a.m. EST. The sell-off came in response to adjusted fourth-quarter earnings that came in below consensus this morning.

Analysts had forecast Energizer would earn $0.81 per share, pro forma, on sales of $747.2 million. In fact, Energizer beat that revenue forecast, collecting $763 million, but its earnings came up short at $0.59 per share, pro forma.

White arrow declining sharply atop a stock tickertape display bathed in red

Image source: Getty Images.

So what

Pro forma results also appear to overstate Energizer's profit, as the company suffered a quarterly loss of $0.67 per share when earnings are calculated according to generally accepted accounting principles (GAAP). For the year, however, Energizer remained profitable at $0.44 per share on a GAAP basis.

Sales for the fourth fiscal quarter grew a better-than-expected 6% in comparison to last year's final quarter, although this was a deceleration from the 10% sales growth Energizer enjoyed for the year as a whole.

Now what

Looking ahead to the fiscal year 2021 now underway, Energizer gave new guidance for sales growth ranging from 2% to 4%. Management did not give a GAAP earnings estimate for 2021, but did say that its adjusted earnings per share will range from $2.95 to $3.25. At the midpoint, this appears likely to fall short of analysts' projected $3.13. In addition to the Q4 earnings miss, this gives investors a second reason to want to sell Energizer stock today.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.