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In the last reported quarter, the company’s earnings per share (EPS) of $1.54 surpassed the Zacks Consensus Estimate by 1.3%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on all the occasions, delivering an earnings surprise of 2%, on average.
Let’s see how things have shaped up for Ecolab prior to this announcement.
Global Industrial
Revenue uptick was observed in the third quarter of 2023 in the Global Industrial category, which includes the Water, Food & Beverage, Paper, and Downstream units. Water and food and beverage sales have been growing over the last three months, according to the company's third-quarter earnings call in October. Volume has helped the company’s customers generate more and better products while using less water, according to management. Customers can cut costs by using less water, which also reduces energy use and carbon footprint. The company's revenues in the fourth quarter are likely to have increased due to the above-mentioned tailwinds.
Management was not impressed with the performance of the Paper business, which was due to Ecolab's customers reducing inventories on the back of disruptions that they had over the past few years. Management anticipated that the company's strong performance in the fourth quarter of 2023 is likely to have been driven by new business. Management is also hopeful that in the upcoming quarters, there will be an improvement in clients' inventory breakdown. This is likely to have driven up the segmental revenues in the to-be-reported quarter.
The Zacks Consensus Estimate for the fourth-quarter Global Industrial segment revenues is currently pegged at $1.88 billion, suggesting an uptick of 2.5% 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 segment of Ecolab continued its extremely strong recovery, driven by share gains in units served, solutions offered, and sales delivered, and concentrated on new business and penetration, according to the company's management during the third-quarter 2023 earnings call. Management anticipates that substantial margin improvements will continue in the second half of 2024, driven primarily by productivity, growth, and value pricing. Furthermore, the Institutional segment is anticipated to be positioned as a major participant in a market that is undergoing a fundamental shift due to changing customer behavior and rising usage of digital technologies thanks to advances in labor automation. The segment's revenues in the fourth quarter are expected to have benefited greatly from these tailwinds.
The management reports a decrease in dine-in traffic since takeout and online ordering are becoming increasingly popular. On the same call, Ecolab affirmed that third-quarter sales in the U.S. market had improved significantly. Additionally, management anticipates that this momentum continue in the upcoming quarters. This is likely to add even more to the segmental revenues in the fourth quarter of 2023.
The Zacks Consensus Estimate for the fourth-quarter Global Institutional & Specialty segment revenues is currently pegged at $1.26 billion, suggesting an uptick of 9.6% from the year-ago quarter’s reported figure.
Other Factors at Work
The revenues from Pest Elimination (a component of Ecolab's broader Other segment) are likely to have stemmed from the ongoing robust demand for the product in commercial businesses. Additionally, Ecolab has been offering disinfection services to its clientele, which is likely to have increased the company’s quarterly earnings.
Management seems concerned, given the sustained high costs of delivering goods and the slowing worldwide demand. Hence, the segmental revenues for the fourth quarter suffered from persistently rising energy surcharges that affected demand and worldwide energy prices.
The Estimate Picture
For fourth-quarter 2023, the Zacks Consensus Estimate of $3.95 billion for total revenues implies an improvement of 7.6% from the prior-year quarter’s reported figure.
The consensus estimate for EPS is pegged at $1.54, implying an improvement of 23.2% from the prior-year period’s reported number.
What Our Model Suggests
Our proven model does not conclusively predict an earnings beat for Ecolab this time around. The combination of a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here, as you will see below.
Earnings ESP: Ecolab has an Earnings ESP of 0.00%. 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.
The stock fell 5.2% in the past year. XRAY’s earnings beat estimates in the last reported quarter. It has a trailing four-quarter average earnings surprise of 20.65%.
Merit Medical Systems (MMSI - Free Report) has an Earnings ESP of +3.68% and a Zacks Rank of 2 at present.
The stock has risen 15% in the past year. MMSI’s earnings beat estimates in the last reported quarter. It has a trailing four-quarter average earnings surprise of 14.41%.
Health Catalyst, Inc. (HCAT - Free Report) has an Earnings ESP of +300.00% and a Zacks Rank of 2. HCAT has an estimated growth rate of 61.5% for 2024.
Health Catalyst’s earnings surpassed estimates in all the trailing four quarters, with the average surprise being 185.4%.
Image: Bigstock
Ecolab (ECL) to Report Q4 Earnings: What's in the Cards?
Ecolab, Inc. (ECL - Free Report) is scheduled to report fourth-quarter 2023 results on Feb 13, before the opening bell.
In the last reported quarter, the company’s earnings per share (EPS) of $1.54 surpassed the Zacks Consensus Estimate by 1.3%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on all the occasions, delivering an earnings surprise of 2%, on average.
Let’s see how things have shaped up for Ecolab prior to this announcement.
Global Industrial
Revenue uptick was observed in the third quarter of 2023 in the Global Industrial category, which includes the Water, Food & Beverage, Paper, and Downstream units. Water and food and beverage sales have been growing over the last three months, according to the company's third-quarter earnings call in October. Volume has helped the company’s customers generate more and better products while using less water, according to management. Customers can cut costs by using less water, which also reduces energy use and carbon footprint. The company's revenues in the fourth quarter are likely to have increased due to the above-mentioned tailwinds.
Management was not impressed with the performance of the Paper business, which was due to Ecolab's customers reducing inventories on the back of disruptions that they had over the past few years. Management anticipated that the company's strong performance in the fourth quarter of 2023 is likely to have been driven by new business. Management is also hopeful that in the upcoming quarters, there will be an improvement in clients' inventory breakdown. This is likely to have driven up the segmental revenues in the to-be-reported quarter.
The Zacks Consensus Estimate for the fourth-quarter Global Industrial segment revenues is currently pegged at $1.88 billion, suggesting an uptick of 2.5% 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 segment of Ecolab continued its extremely strong recovery, driven by share gains in units served, solutions offered, and sales delivered, and concentrated on new business and penetration, according to the company's management during the third-quarter 2023 earnings call. Management anticipates that substantial margin improvements will continue in the second half of 2024, driven primarily by productivity, growth, and value pricing. Furthermore, the Institutional segment is anticipated to be positioned as a major participant in a market that is undergoing a fundamental shift due to changing customer behavior and rising usage of digital technologies thanks to advances in labor automation. The segment's revenues in the fourth quarter are expected to have benefited greatly from these tailwinds.
The management reports a decrease in dine-in traffic since takeout and online ordering are becoming increasingly popular. On the same call, Ecolab affirmed that third-quarter sales in the U.S. market had improved significantly. Additionally, management anticipates that this momentum continue in the upcoming quarters. This is likely to add even more to the segmental revenues in the fourth quarter of 2023.
The Zacks Consensus Estimate for the fourth-quarter Global Institutional & Specialty segment revenues is currently pegged at $1.26 billion, suggesting an uptick of 9.6% from the year-ago quarter’s reported figure.
Other Factors at Work
The revenues from Pest Elimination (a component of Ecolab's broader Other segment) are likely to have stemmed from the ongoing robust demand for the product in commercial businesses. Additionally, Ecolab has been offering disinfection services to its clientele, which is likely to have increased the company’s quarterly earnings.
Management seems concerned, given the sustained high costs of delivering goods and the slowing worldwide demand. Hence, the segmental revenues for the fourth quarter suffered from persistently rising energy surcharges that affected demand and worldwide energy prices.
The Estimate Picture
For fourth-quarter 2023, the Zacks Consensus Estimate of $3.95 billion for total revenues implies an improvement of 7.6% from the prior-year quarter’s reported figure.
The consensus estimate for EPS is pegged at $1.54, implying an improvement of 23.2% from the prior-year period’s reported number.
What Our Model Suggests
Our proven model does not conclusively predict an earnings beat for Ecolab this time around. The combination of a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here, as you will see below.
Earnings ESP : Ecolab has an Earnings ESP of 0.00%. 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.
Dentsply Sirona (XRAY - Free Report) has an Earnings ESP of +6.43% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The stock fell 5.2% in the past year. XRAY’s earnings beat estimates in the last reported quarter. It has a trailing four-quarter average earnings surprise of 20.65%.
Merit Medical Systems (MMSI - Free Report) has an Earnings ESP of +3.68% and a Zacks Rank of 2 at present.
The stock has risen 15% in the past year. MMSI’s earnings beat estimates in the last reported quarter. It has a trailing four-quarter average earnings surprise of 14.41%.
Health Catalyst, Inc. (HCAT - Free Report) has an Earnings ESP of +300.00% and a Zacks Rank of 2. HCAT has an estimated growth rate of 61.5% for 2024.
Health Catalyst’s earnings surpassed estimates in all the trailing four quarters, with the average surprise being 185.4%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.