Cleaning and pest-control service provider Ecolab, Inc. (ECL) reported Tuesday a profit for the third quarter that grew 18 percent from last year, reflecting operating margin gains and revenue growth.
Adjusted earnings per share topped analysts' expectations by a penny, while quarterly revenues missed their estimates. The company also provided earnings forecast for the second quarter, in line with Street view, and raised earnings forecast for the full-year 2014.
"We are pleased with our third quarter, as we delivered strong top and bottom line results despite challenging global economic conditions. Acquisition adjusted sales growth has improved sequentially each quarter this year. This is the result of very successful new business and innovation initiatives," Chairman and CEO Douglas Baker, Jr. said.
The St. Paul, Minnesota-based company reported net income of $364.9 million or $1.19 per share for the third quarter, higher than $308.0 million or $1.00 per share in the prior-year quarter.
Excluding special items, adjusted net income for the quarter was $1.21 per share, compared to $1.04 per share in the year-ago quarter.
On average, 18 analysts polled by Thomson Reuters expected the company to report earnings of $1.20 per share for the quarter. Analysts' estimate typically excludes special items.
Net sales for the quarter grew 6 percent to a record of $3.69 billion from $3.48 billion in the same quarter last year, but missed fifteen Wall Street analysts' consensus estimate of 3.73 billion.
Fixed currency sales also rose 6 percent. When measured in fixed currencies and adjusted for acquisitions, sales grew 6 percent from last year, led by Energy, Specialty and Other growth and strong gains in Latin America and good results in North America and Asia Pacific.
Global industrial net sales grew 3 percent to $1.25 billion, global institutional net sales increased 4 percent to $1.13 billion, and global energy net sales improved 14 percent to $1.09 billion from the year-ago quarter. Other net sales grew 7 percent to $196.6 million from last year.
Operating Income for the quarter grew 20 percent to $571.4 million from last year's $476.0 million.
Looking ahead to the fourth quarter, Ecolab anticipates adjusted earnings in a range of $1.18 to $1.22 per share. Analysts expect the company to report earnings of $1.21 per share for the quarter.
For fiscal 2014, the company raised adjusted earnings guidance to a range of $4.16 to $4.20 per share from the prior range of $4.14 to $4.20 per share. Street is currently looking for full-year 2014 earnings of $4.18 per share.
"Our competitive strengths and culture of success in serving fundamental market needs drive our expectations for full-year upper-teens adjusted earnings per share growth this year, and for continued superior shareholder returns in the longer-term," Baker, Jr. added.
In Tuesday's regular trading session, ECL is currently trading at $110.94, up $0.25 or 0.27% on a volume of 19,407 shares.
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