S&P 500 (NYSE:SPY) component Ecolab (NYSE:ECL) will unveil its latest earnings on Tuesday, July 31, 2012. Ecolab develops and markets cleaning and sanitizing products and programs, pest elimination, maintenance, and repair services for the hospitality, foodservice, healthcare and industrial markets.
Ecolab Earnings Preview Cheat Sheet
Wall St. Earnings Expectations: The average analyst estimate is for net income of 72 cents per share, a rise of 12.5% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 73 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 72 cents during the last month. Analysts are projecting profit to rise by 18.5% versus last year to $3.01.
Past Earnings Performance: The company topped forecasts last quarter after being in line with estimates the quarter prior. In the first quarter, it reported profit of 50 cents per share versus a mean estimate of 48 cents. Two quarters ago, it reported net income of 70 cents per share.
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Wall St. Revenue Expectations: Analysts predict a rise of 77.6% in revenue from the year-earlier quarter to $3.02 billion.
A Look Back: In the first quarter, profit fell 46.9% to $49.7 million (17 cents a share) from $93.6 million (40 cents a share) the year earlier, but exceeded analyst expectations. Revenue rose 85.1% to $2.81 billion from $1.52 billion.
Stock Price Performance: Between July 19, 2012 and July 25, 2012, the stock price dropped $2.51 (-3.7%), from $67.93 to $65.42. The stock price saw one of its best stretches over the last year between December 28, 2011 and January 12, 2012, when shares rose for 11 straight days, increasing 5.8% (+$3.27) over that span. It saw one of its worst periods between July 26, 2011 and August 2, 2011 when shares fell for six straight days, dropping 4.6% (-$2.35) over that span.
With double-digit revenue growth the past four quarters, this earnings release is a chance to keep that positive trend going. The company has averaged year-over-year revenue growth of 31.3% over the last four quarters.
The company is trying to stem some negative momentum heading into this earnings announcement. Profit has dropped by a year-over-year average of 23.3% over the past four quarters.
Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.13 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 1.7 in the fourth quarter of the last fiscal year to the last quarter driven in part by a decrease in current assets. Current assets decreased 26.6% to $3.96 billion while liabilities rose by 10.7% to $3.51 billion.
Analyst Ratings: With 11 analysts rating the stock a buy, none rating it a sell and four rating the stock a hold, there are indications of a bullish stance by analysts.
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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)
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