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Ecolab (ECL) to Report Q4 Earnings: What's in the Offing?

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Ecolab, Inc. (ECL - Free Report) is scheduled to report fourth-quarter 2021 results on Feb 15, before the opening bell.

In the last-reported quarter, the company’s earnings of $1.38 per share surpassed the Zacks Consensus Estimate by 6.9%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on two occasions, missed the same in one and broke even in the other one, delivering an earnings surprise of 2.3%, on average.                   

Let’s see how things have shaped up for Ecolab prior to this announcement.

Global Industrial

The Global Industrial segment witnessed a sales uptick in the third quarter of 2021 on strong product sales. Water and Paper sales also grew during the quarter, driven by recovering market conditions and new business wins.

Ecolab's recent programs, including Net Zero, are expected to provide its Industrial segment’s customers improved ways to deliver on their commitments. In its third-quarter earnings release, the company had confirmed that it was experiencing significant progress via Net Zero. These momentums are likely to have continued in the to-be-reported quarter as well, thus driving up revenues.

Ecolab Inc. Price and EPS Surprise

Ecolab Inc. Price and EPS Surprise

Ecolab Inc. price-eps-surprise | Ecolab Inc. Quote

Robust adoption of Ecolab’s Peroxide Multi Surface Cleaner and Disinfectant for use against SARS-CoV-2 and Sink & Surface Cleaner Sanitizer to address unexpected hygiene challenges is also expected to have contributed robustly to the segmental revenues in the quarter.

Other notable offerings from the company include the Exelerate TUFSOIL and the Water Flow Intelligence, which are likely to have registered continued customer adoption, thereby pushing up fourth-quarter revenues.

Rising demand for hygiene programs and growing awareness about the usage of natural resources are consistently boosting the Food & Beverage business. Also, there has been a strong recovery in the number of restaurants served by Ecolab as well as the number of solutions bought from the company with the gradual reopening of markets. All these factors are likely to have contributed significantly to the company’s fourth-quarter results.

Global Institutional & Specialty

Ecolab’s Institutional & Specialty segment recorded strong growth in the last-reported quarter on the back of recovering markets in the United States and Europe. The market recovery is expected to have continued in the fourth quarter, thereby contributing to the segment’s revenues.

Other Factors at Work

Ecolab’s Cockroach Multi-Station is likely to have continued to drive the company’s global Pest Elimination (a component of Ecolab’s broader Other segment) revenues in the to-be-reported quarter. The Pest Elimination business is likely to have continued to register strong growth in the fourth quarter, driven by new business wins and recovering markets.

The Global Healthcare and Life Sciences segment is likely to have witnessed sustained underlying sales growth during the fourth quarter on the back of new business wins and increased hygiene awareness. This momentum, along with accelerating pricing and structured productivity resulting from Ecolab’s digital automation, is also likely to have contributed robustly to this business’s revenues.

However, management's expectations of a lower bottom-line growth due to temporary pandemic-related effects on broad business activity impacting the speed of the market recovery, along with supply chain disruptions in the fourth quarter, raises apprehensions on the stock.

The Estimate Picture

For fourth-quarter 2021, the Zacks Consensus Estimate of $3.19 billion for total revenues implies an improvement of 4.2% from the prior-year quarter’s reported figure.

The consensus estimate for earnings per share is pegged at $1.32, implying an uptick of 7.3% from the prior-year period’s reported number.

What Our Model Suggests

Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, has higher chances of beating estimates. However, this is not the case here as you can see:

Earnings ESP: Ecolab has an Earnings ESP of -3.79%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #5 (Strong Sell).

Stocks Worth a Look

Here are a few medical stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.

AMN Healthcare Services, Inc. (AMN - Free Report) has an Earnings ESP of +10.29% and a Zacks Rank of 1. AMN has an estimated long-term growth rate of 16.2%.

AMN Healthcare’s earnings surpassed estimates in the trailing four quarters, with the average surprise being 19.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Henry Schein, Inc. (HSIC - Free Report) has an Earnings ESP of +0.83% and is a Zacks #2 Ranked stock. HSIC has an estimated long-term growth rate of 11.8%.

Henry Schein’s earnings surpassed estimates in the trailing four quarters, with the average surprise being 21.9%.

Allscripts Healthcare Solutions (MDRX - Free Report) has an Earnings ESP of +5.38% and a Zacks Rank of 2 at present. MDRX has an estimated long-term growth rate of 11.1%.

Allscripts’ earnings surpassed estimates in all of the trailing four quarters, with the average surprise being 34.1%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.