We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
In the last-reported quarter, the company’s earnings of $1.30 per share lagged the Zacks Consensus Estimate by 2.3%. 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, delivering an earnings surprise of 0.1%, 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 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, the Global Industrial segment has been witnessing new business over the past few months, driven by increased penetration and new solutions for the same sites, despite softness in same-store sale demand. This momentum is likely to have continued in the fourth quarter, thereby pushing up the segmental revenues.
On the third-quarter earnings call in November 2022, Ecolab confirmed that its Water business was continuing to register strong momentum. Rising water scarcity issues, the need for net zero carbon and water, and rising demand for water are likely to have kept the momentum going. This is expected to have considerably driven the fourth-quarter 2022 top line.
Given Ecolab's expertise in water management and water reduction and helping customers operate with less or zero water, it is likely to increase demand for its products. In the case of energy, Ecolab and Siemens had tied up (October 2022) with the aim of helping customers accelerate their progress toward sustainability and productivity goals. This partnership is likely to have aided industrial customers in getting water reduction, thus leading to power reduction and ultimately resulting in carbon and cost reduction. This is likely to have continued significantly in the to-be-reported quarter, thus driving up revenues.
Notable offerings from the company include the Peroxide Multi Surface Cleaner, Sink & Surface Cleaner Sanitizer and the Water Flow Intelligence, which are likely to have registered continued customer adoption in the fourth quarter, thereby pushing up revenues.
We estimate the fourth-quarter Global Industrial segment revenues to be $1.78 billion, suggesting an uptick of 4.7% from the year-ago quarter’s reported figure.
Ecolab’s Global 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 and good new business wins, which successfully leveraged global market trends. Specialty sales showed robust growth on the back of strong quickservice sales gains.
On the third-quarter 2022 earnings call, management confirmed that in the United States, the dine-in traffic was still down, though it was quite ahead of pre-COVID levels. The company has been working toward driving more demand through new business, penetration and innovation over the recent months. However, Ecolab’s dine-in traffic at U.S. restaurants is likely to have remained low in the fourth quarter. This is expected to have partially weighed on the to-be-reported quarter’s revenues.
However, the segment might have been adversely impacted by labor challenges, especially on the cost side, and rising food and energy costs, which are expected to have increased further.
We estimate the fourth-quarter Global Institutional & Specialty segment revenues to be $1.15 billion, suggesting an improvement of 8% from the year-ago quarter’s reported figure.
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 the war and the energy crisis impacting demand and global energy costs are likely to have weighed on the fourth-quarter segmental revenues.
On the international front, Ecolab had stated on its third-quarter earnings call that it has been preparing for an environment where inflation will remain high for longer and interest rates will impact demand. Per the company, this is especially true in Europe, where the war and the energy crisis have been impacting demand and global energy costs. On the Eastern front, Ecolab has been witnessing an impact on demand and supply, especially for industrial businesses, and is also impacted by costs due to the war. These are likely to have weighed on the company’s revenues in the to-be-reported quarter.
The Estimate Picture
For fourth-quarter 2022, the Zacks Consensus Estimate of $3.67 billion for total revenues implies an improvement of 9.1% from the prior-year quarter’s reported figure.
Our projection for fourth-quarter revenues is $3.64 billion, implying an uptick of 8.2% year over year.
The consensus estimate for earnings per share is pegged at $1.25, implying a decline of 2.3% from the prior-year period’s reported number.
Our projection of adjusted earnings per share is currently pegged at $1.20, suggesting a decline of 6% 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 -2.40%. 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 #2.
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.
Alkermes plc (ALKS - Free Report) has an Earnings ESP of +49.57% and a Zacks Rank of 2. ALKS has an estimated long-term growth rate of 23.1%.
Exact Sciences Corporation (EXAS - Free Report) has an Earnings ESP of +11.73% and is a Zacks #2 Rank stock. EXAS has an estimated growth rate of 29.4% for 2023.
Exact Sciences’ earnings surpassed estimates in three of the trailing four quarters and missed the same in one, with the average surprise being 0.6%.
Penumbra, Inc. (PEN - Free Report) has an Earnings ESP of +11.11% and sports a Zacks Rank of 1 at present. PEN’s earnings yield of 0.4% compares favorably with the industry’s negative yield.
Penumbra’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, with the average surprise being 37.6%.
Image: Bigstock
Ecolab (ECL) to Report Q4 Earnings: What's in the Offing?
Ecolab, Inc. (ECL - Free Report) is scheduled to report fourth-quarter 2022 results on Feb 14, before the opening bell.
In the last-reported quarter, the company’s earnings of $1.30 per share lagged the Zacks Consensus Estimate by 2.3%. 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, delivering an earnings surprise of 0.1%, 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 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, the Global Industrial segment has been witnessing new business over the past few months, driven by increased penetration and new solutions for the same sites, despite softness in same-store sale demand. This momentum is likely to have continued in the fourth quarter, thereby pushing up the segmental revenues.
On the third-quarter earnings call in November 2022, Ecolab confirmed that its Water business was continuing to register strong momentum. Rising water scarcity issues, the need for net zero carbon and water, and rising demand for water are likely to have kept the momentum going. This is expected to have considerably driven the fourth-quarter 2022 top line.
Given Ecolab's expertise in water management and water reduction and helping customers operate with less or zero water, it is likely to increase demand for its products. In the case of energy, Ecolab and Siemens had tied up (October 2022) with the aim of helping customers accelerate their progress toward sustainability and productivity goals. This partnership is likely to have aided industrial customers in getting water reduction, thus leading to power reduction and ultimately resulting in carbon and cost reduction. This is likely to have continued significantly in the to-be-reported quarter, thus driving up revenues.
Notable offerings from the company include the Peroxide Multi Surface Cleaner, Sink & Surface Cleaner Sanitizer and the Water Flow Intelligence, which are likely to have registered continued customer adoption in the fourth quarter, thereby pushing up revenues.
We estimate the fourth-quarter Global Industrial segment revenues to be $1.78 billion, suggesting an uptick of 4.7% from the year-ago quarter’s reported figure.
Ecolab Inc. Price and EPS Surprise
Ecolab Inc. price-eps-surprise | Ecolab Inc. Quote
Global Institutional & Specialty
Ecolab’s Global 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 and good new business wins, which successfully leveraged global market trends. Specialty sales showed robust growth on the back of strong quickservice sales gains.
On the third-quarter 2022 earnings call, management confirmed that in the United States, the dine-in traffic was still down, though it was quite ahead of pre-COVID levels. The company has been working toward driving more demand through new business, penetration and innovation over the recent months. However, Ecolab’s dine-in traffic at U.S. restaurants is likely to have remained low in the fourth quarter. This is expected to have partially weighed on the to-be-reported quarter’s revenues.
However, the segment might have been adversely impacted by labor challenges, especially on the cost side, and rising food and energy costs, which are expected to have increased further.
We estimate the fourth-quarter Global Institutional & Specialty segment revenues to be $1.15 billion, suggesting an improvement of 8% from the year-ago quarter’s reported figure.
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 the war and the energy crisis impacting demand and global energy costs are likely to have weighed on the fourth-quarter segmental revenues.
On the international front, Ecolab had stated on its third-quarter earnings call that it has been preparing for an environment where inflation will remain high for longer and interest rates will impact demand. Per the company, this is especially true in Europe, where the war and the energy crisis have been impacting demand and global energy costs. On the Eastern front, Ecolab has been witnessing an impact on demand and supply, especially for industrial businesses, and is also impacted by costs due to the war. These are likely to have weighed on the company’s revenues in the to-be-reported quarter.
The Estimate Picture
For fourth-quarter 2022, the Zacks Consensus Estimate of $3.67 billion for total revenues implies an improvement of 9.1% from the prior-year quarter’s reported figure.
Our projection for fourth-quarter revenues is $3.64 billion, implying an uptick of 8.2% year over year.
The consensus estimate for earnings per share is pegged at $1.25, implying a decline of 2.3% from the prior-year period’s reported number.
Our projection of adjusted earnings per share is currently pegged at $1.20, suggesting a decline of 6% 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 -2.40%. 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 #2.
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.
Alkermes plc (ALKS - Free Report) has an Earnings ESP of +49.57% and a Zacks Rank of 2. ALKS has an estimated long-term growth rate of 23.1%.
Alkermes’ earnings surpassed estimates in three of the trailing four quarters and broke even in one, with the average surprise being 306.7%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Exact Sciences Corporation (EXAS - Free Report) has an Earnings ESP of +11.73% and is a Zacks #2 Rank stock. EXAS has an estimated growth rate of 29.4% for 2023.
Exact Sciences’ earnings surpassed estimates in three of the trailing four quarters and missed the same in one, with the average surprise being 0.6%.
Penumbra, Inc. (PEN - Free Report) has an Earnings ESP of +11.11% and sports a Zacks Rank of 1 at present. PEN’s earnings yield of 0.4% compares favorably with the industry’s negative yield.
Penumbra’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, with the average surprise being 37.6%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.