Ecolab Inc Earnings Cheat Sheet: Spring Cleaning is Here

S&P 500 (NYSE:SPY) component Ecolab Inc. (NYSE:ECL) reported a lower net income in first quarter, missing analysts’ estimates. Ecolab Inc. develops and markets cleaning and sanitizing products and programs, pest elimination, maintenance and repair services for the hospitality, foodservice, healthcare and industrial markets.

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Ecolab Earnings Cheat Sheet for the First Quarter

Results: Net income for the cleaning products company fell to $93.6 million (40 cents/share) vs. $95.5 million (40 cents/share) a year earlier. A decline of 2% from the year earlier quarter.

Revenue: Rose 6% to $1.52 billion YoY.

Actual vs. Wall St. Expectations: ECL fell short of the mean analyst estimate of 44 cents/share. Estimates ranged from 43 cents per share to 46 cents per share.

Quoting Management: Commenting on the quarter, Douglas M. Baker, Jr., Ecolab’s Chairman, President and Chief Executive Officer said, “We are off to a strong start in 2011, and it bodes well for the remainder of the year. Momentum was better in all regions, as our aggressive actions to expand market share and increase efficiency leveraged better market conditions to offset higher delivered product costs. We remain confident in our outlook for 2011 and expect better top and bottom line growth over the balance of the year. Our end markets and sales momentum are improving, our growth investments are delivering effectively, we are implementing appropriate pricing to offset the higher delivered product costs and our recent acquisitions are providing excellent strategic value. We are making good progress in our efforts to transform Europe into a higher growth, more efficient and more profitable business, and expect to see these results reflected in the second half and accelerating into the next several years. While delivered product costs have risen faster than expected, we believe we have the right actions in place to effectively manage them. We look for our better sales momentum and margin improvement actions to enable us to once again deliver strong earnings gains and handsome returns to shareholders this year and for the years ahead.”

Key Stats: Last quarter’s profit decrease breaks a streak of four consecutive quarters of year-over-year profit increases. In the fourth quarter of the last fiscal year, net income rose 13.4% from the year earlier while the figure increased 20.1% in third quarter of the last fiscal year, 30.5% four quarters ago and 66.4% five quarters earlier.

Over the last five quarters, revenue has increased 3.9% on average year over year. The biggest increase came in the first quarter of the last fiscal year, when revenue rose 6.2% from the year earlier quarter.

Competitors to Watch: Ocean Bio-Chem, Inc. (NASDAQ:OBCI), Zep, Inc. (NYSE:ZEP), PURE Bioscience (NASDAQ:PURE), Rollins, Inc. (NYSE:ROL), Proctor & Gamble (NYSE:PG), The Clorox Company (NYSE:CLX) and Church & Dwight (NYSE:CHD).

Today’s Performance: Shares of ECL are trading at $51.85 as of April 26, 2011 at 10:03 AM ET, down 16 cents from the previous close.


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