Ecolab Q2 Adj. Profit Meets View, But Revenues Miss; Backs 2015 Outlook

(RTTNews) - Cleaning and pest-control service provider Ecolab, Inc. (ECL) reported Tuesday a profit for the second quarter that declined three percent from last year, reflecting revenue decline. Adjusted earnings per share matched analysts' expectations, while quarterly revenues missed their estimates. The company also provided earnings forecast for the third quarter, in line with Street view, and confirmed earnings forecast for the full-year 2015.

"We delivered a solid quarter as our focus on innovative products and effective on-site service drove better results and improved value for customers, enabling us to once again outpace generally slower economic trends and substantial currency headwinds," Chairman and CEO Douglas Baker, Jr. said.

The St. Paul, Minnesota-based company reported net income attributable to Ecolab of $302.0 million or $1.00 per share for the second quarter, lower than $311.4 million or $1.02 per share in the prior-year quarter.

Excluding special items, adjusted net income for the quarter was $1.08 per share, compared to $1.03 per share in the year-ago quarter.

On average, 18 analysts polled by Thomson Reuters expected the company to report earnings of $1.08 per share for the quarter. Analysts' estimate typically excludes special items.

Net sales for the quarter declined 5 percent to $3.39 billion from $3.57 billion in the same quarter last year, and missed fifteen Wall Street analysts' consensus estimate of 3.47 billion.

The company noted that fixed currency and acquisition adjusted fixed currency sales grew 2 percent, led by mid-single digit growth from the global institutional, global industrial and other segments, with strong gains regionally in Latin America and Middle East & Africa as well as good growth in Asia Pacific.

Global industrial net sales grew 4 percent to $1.20 billion, and global institutional net sales increased 6 percent to $1.10 billion, while global energy net sales declined 5 percent to $964.8 million from the year-ago quarter. Other net sales grew 5 percent to $195.4 million from last year.

Operating income for the quarter declined 15 percent to $437.8 million from last year's $512.2 million.

Looking ahead to the fourth quarter, Ecolab anticipates adjusted earnings in a range of $1.24 to $1.31 per share. Analysts expect the company to report earnings of $1.31 per share for the quarter.

For fiscal 2015, the company continues to project adjusted earnings guidance to the range of $4.45 to $4.60 per share. Street is currently looking for full-year 2015 earnings of $4.52 per share.

The company said it continues to expect strong mid-teens earnings per share growth in 2015 before the impact of currency as its significantly outperforms its markets.

"We will continue driving our successful model for growth, focusing on new accounts and increased solutions, enhancing our premium service offering and improving our cost efficiency, while delivering our committed synergies. We will also continue to make the right investments in our business to build growth for the future," Baker, Jr. added.

In Tuesday's regular trading session, ECL is currently trading at $112.80, up $4.41 or 4.07% on a volume of 0.80 million shares.