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Ecolab (ECL) to Report Q2 Earnings: Will It Pull a Surprise?

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St. Paul, MN-based Ecolab Inc. (ECL - Free Report) , a leading provider of water, hygiene and energy technologies and services, is expected to report second-quarter 2017 results on Aug 1.

Last quarter, the company reported earnings of 80 cents per share, which missed the Zacks Consensus Estimate of 81 cents. Meanwhile, in the trailing four quarters, the company delivered an average earnings miss of 0.70%. Let’s see how things are shaping up prior to this release.

Factors at Play

Ecolab’s earnings growth despite a challenging business environment raises investor’s confidence. Additionally, the company's large base of recurring revenues, industry-leading technologies and excellent field service are significant propellers. For the quarter under review, Ecolab projects adjusted diluted earnings per share in the range of $1.08 to $1.15, compared with $1.08 in the year-ago period.

We are also upbeat about the acquisition of Abednego Environmental Services. Notably, the Abednego part of Ecolab’s Nalco Water business operations is expected to boost performance this quarter. Nalco is the worldwide leader in sustainability services and integrated water treatment solutions.

For the current quarter, one analyst moved south, compared to no upward revision in the last two months. The Zacks Consensus Estimate for earnings per share is stable at $1.12 over the same time frame. Despite slightly unfavorable price trend, the stock has solid potential for appreciation with a long-term expected earnings growth rate of 13.25%.

Furthermore, uncertainties associated with the possibilities of a repeal of the Affordable Care Act under President Trump add to the company’s concerns.

Ecolab Inc. Price and EPS Surprise


Ecolab Inc. Price and EPS Surprise | Ecolab Inc. Quote

Earnings Whispers

Our quantitative model doesn’t conclusively point to an earnings beat this quarter for the stock.

That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: The Earnings ESP for Ecolab is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.12. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Ecolab carries a Zacks Rank #2 which increases the odds of an earnings beat but an Earnings ESP of 0.00% keeps our prediction inconclusive.

Please note that we caution against stocks with a Zacks Ranks #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are three companies you may want to consider as our proven model shows that they have the right combination of elements to post an earnings beat this quarter.

Becton, Dickinson and Company (BDX - Free Report) has an Earnings ESP of +0.41% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Align Technology, Inc. (ALGN - Free Report) has an Earnings ESP of +1.37% and sports a Zacks Rank #1.

Stryker Corporation (SYK - Free Report) has an Earnings ESP of +0.66% and carries a Zacks Rank #2.

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