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In the last-reported quarter, the company’s earnings of $1.10 per share surpassed the Zacks Consensus Estimate by 1.9%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on three occasions and broke even the same in one, delivering an earnings surprise of 2.4%, 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 second quarter of 2022. Water, Food & Beverage, Paper and Downstream had recorded solid growth in the last-reported quarter, led by new business wins and accelerated total pricing. Per the company’s last-reported quarter’s earnings call, animal health and data centers have been performing quite well over the past few months. This momentum is likely to have continued in the third quarter as well.
During the second-quarter earnings call in July, Ecolab had confirmed that its Water business was continuing to register strong momentum. Rising water scarcity issues, need for net zero carbon and water, and rising demand for water are likely to keep the momentum going. This is expected to have considerably driven the third-quarter 2022 top line.
Notable offerings from the company include the Peroxide Multi Surface Cleaner, Disinfectant for use against SARS-CoV-2, Sink & Surface Cleaner Sanitizer and the Water Flow Intelligence, which are likely to have registered continued customer adoption in the third quarter, thereby pushing up revenues.
Global Institutional & Specialty
Ecolab’s Institutional & Specialty segment recorded strong growth in the last-reported quarter, courtesy of the company’s performance in the Institutional and Specialty divisions. The Institutional division reflected robust volume gains, accelerating total pricing, good new business wins and innovation, which successfully leveraged global market trends. Specialty sales showed robust growth on the back of strong quickservice sales gains. This trend is likely to have continued in the third quarter, thereby contributing to the overall top line.
Ecolab's programs (including Ecolab Science Certified and Net Zero) are expected to provide its Industrial segment’s customers with improved ways to deliver on their commitments. In its second-quarter earnings call, the company had confirmed that it was experiencing significant progress via Net Zero. These trends are likely to have continued in the to-be-reported quarter as well, thus driving up revenues.
However, Ecolab confirmed during its second-quarter earnings call that the dine-in traffic in the U.S. restaurants is still down. Although the traffic has considerably recovered, it is likely to remain down in the third quarter as well. This is expected to have partially weighed on the to-be-reported quarter’s revenues.
Other Factors at Work
Rising demand for Pest Elimination (a component of Ecolab’s broader Other segment) in food and beverage plants to avoid food safety issues is likely to have driven the segment’s revenues in the to-be-reported quarter. However, a higher energy surcharge due to increasing oil prices is likely to weigh on the third-quarter segmental revenues.
On the international front, Ecolab had stated during its second-quarter earnings call that its Europe business has been doing well over the past few months. However, on the Eastern front, Ecolab’s China business is likely to be lower due to strict lockdown measures. Also, the current inflationary pressures, supply-chain constraints and high labor costs are likely to weigh on the company’s revenues in the to-be-reported quarter.
The Estimate Picture
For third-quarter 2022, the Zacks Consensus Estimate of $3.68 billion for total revenues implies an improvement of 10.9% from the prior-year quarter’s reported figure.
Our projection of fiscal third-quarter revenue is currently pegged at $3.70 billion, reflecting an uptick of 11.6% year over year.
The consensus estimate for earnings per share is pegged at $1.33, implying a decline of 3.6% from the prior-year period’s reported number.
Our projection of adjusted earnings per share is currently pegged at $1.32, reflecting a decline of 4.4% year over year.
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 -1.93%. 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 #3.
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.
McKesson Corporation (MCK - Free Report) has an Earnings ESP of +0.27% and a Zacks Rank of 2. MCK has an estimated long-term growth rate of 10.1%.
Nevro Corp. (NVRO - Free Report) has an Earnings ESP of +10.91% and is a Zacks #2 Rank stock. NVRO has an estimated growth rate of 23.3% for 2022.
Nevro’s earnings surpassed estimates in two of the trailing four quarters, missed the same in one and matched in the other, with the average surprise being 5.7%.
GoodRx Holdings, Inc. (GDRX - Free Report) has an Earnings ESP of +21.62% and carries a Zacks Rank of 2 at present. GDRX has an estimated long-term growth rate of 16.4%.
GoodRx’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, with the average surprise being 19.4%.
Image: Bigstock
Ecolab (ECL) to Report Q3 Earnings: What's in the Offing?
Ecolab, Inc. (ECL - Free Report) is scheduled to report third-quarter 2022 results on Nov 1, before the opening bell.
In the last-reported quarter, the company’s earnings of $1.10 per share surpassed the Zacks Consensus Estimate by 1.9%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on three occasions and broke even the same in one, delivering an earnings surprise of 2.4%, 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 second quarter of 2022. Water, Food & Beverage, Paper and Downstream had recorded solid growth in the last-reported quarter, led by new business wins and accelerated total pricing. Per the company’s last-reported quarter’s earnings call, animal health and data centers have been performing quite well over the past few months. This momentum is likely to have continued in the third quarter as well.
During the second-quarter earnings call in July, Ecolab had confirmed that its Water business was continuing to register strong momentum. Rising water scarcity issues, need for net zero carbon and water, and rising demand for water are likely to keep the momentum going. This is expected to have considerably driven the third-quarter 2022 top line.
Ecolab Inc. Price and EPS Surprise
Ecolab Inc. price-eps-surprise | Ecolab Inc. Quote
Notable offerings from the company include the Peroxide Multi Surface Cleaner, Disinfectant for use against SARS-CoV-2, Sink & Surface Cleaner Sanitizer and the Water Flow Intelligence, which are likely to have registered continued customer adoption in the third quarter, thereby pushing up revenues.
Global Institutional & Specialty
Ecolab’s Institutional & Specialty segment recorded strong growth in the last-reported quarter, courtesy of the company’s performance in the Institutional and Specialty divisions. The Institutional division reflected robust volume gains, accelerating total pricing, good new business wins and innovation, which successfully leveraged global market trends. Specialty sales showed robust growth on the back of strong quickservice sales gains. This trend is likely to have continued in the third quarter, thereby contributing to the overall top line.
Ecolab's programs (including Ecolab Science Certified and Net Zero) are expected to provide its Industrial segment’s customers with improved ways to deliver on their commitments. In its second-quarter earnings call, the company had confirmed that it was experiencing significant progress via Net Zero. These trends are likely to have continued in the to-be-reported quarter as well, thus driving up revenues.
However, Ecolab confirmed during its second-quarter earnings call that the dine-in traffic in the U.S. restaurants is still down. Although the traffic has considerably recovered, it is likely to remain down in the third quarter as well. This is expected to have partially weighed on the to-be-reported quarter’s revenues.
Other Factors at Work
Rising demand for Pest Elimination (a component of Ecolab’s broader Other segment) in food and beverage plants to avoid food safety issues is likely to have driven the segment’s revenues in the to-be-reported quarter. However, a higher energy surcharge due to increasing oil prices is likely to weigh on the third-quarter segmental revenues.
On the international front, Ecolab had stated during its second-quarter earnings call that its Europe business has been doing well over the past few months. However, on the Eastern front, Ecolab’s China business is likely to be lower due to strict lockdown measures. Also, the current inflationary pressures, supply-chain constraints and high labor costs are likely to weigh on the company’s revenues in the to-be-reported quarter.
The Estimate Picture
For third-quarter 2022, the Zacks Consensus Estimate of $3.68 billion for total revenues implies an improvement of 10.9% from the prior-year quarter’s reported figure.
Our projection of fiscal third-quarter revenue is currently pegged at $3.70 billion, reflecting an uptick of 11.6% year over year.
The consensus estimate for earnings per share is pegged at $1.33, implying a decline of 3.6% from the prior-year period’s reported number.
Our projection of adjusted earnings per share is currently pegged at $1.32, reflecting a decline of 4.4% year over year.
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 -1.93%. 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 #3.
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.
McKesson Corporation (MCK - Free Report) has an Earnings ESP of +0.27% and a Zacks Rank of 2. MCK has an estimated long-term growth rate of 10.1%.
McKesson’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, with the average surprise being 13%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Nevro Corp. (NVRO - Free Report) has an Earnings ESP of +10.91% and is a Zacks #2 Rank stock. NVRO has an estimated growth rate of 23.3% for 2022.
Nevro’s earnings surpassed estimates in two of the trailing four quarters, missed the same in one and matched in the other, with the average surprise being 5.7%.
GoodRx Holdings, Inc. (GDRX - Free Report) has an Earnings ESP of +21.62% and carries a Zacks Rank of 2 at present. GDRX has an estimated long-term growth rate of 16.4%.
GoodRx’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, with the average surprise being 19.4%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.