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Will Global Industrial Unit Aid Ecolab (ECL) in Q4 Earnings?

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Ecolab Inc. (ECL - Free Report) is scheduled to report fourth-quarter 2017 results on Feb 20, before the market opens.

Solid performance in the Global Industrial segment is likely to drive the top line in the fourth quarter. Further, an expected improvement in revenues in other segments also is likely to help the company generate solid results.

The Zacks Consensus Estimate for Global Industrial segment is $1.28 billion. This reflects an increase of 2.6% from the third-quarter figure. Ecolab’s Global Industrial segment primarily provides water treatment and process applications. In third-quarter 2017, revenues in this segment grew 3.8% on a year-over-year basis, to almost $1.25 billion. Recently, Ecolab acquired New York-based Cascade Water Services, which is to be integrated in its Water Business.


Ecolab Inc. Price and Consensus


Ecolab Inc. Price and Consensus | Ecolab Inc. Quote


In the last quarter, the company registered adjusted earnings of $1.37 per share, beating the Zacks Consensus Estimate by a penny. Further, revenues were $3.56 billion, which beat the Zacks Consensus Estimate of $3.55 billion.

Notably, Ecolab has also outperformed the broader industry in the last year. The stock has gained 5.5% versus the industry’s decline of 3.9%.

Let’s take a look at how things are shaping up prior to the fourth-quarter earnings announcement.

Factors at Play

Global Energy to Boost Q4 Top Line

The segment operates under the Nalco Champion name. Global Energy caters to the process chemical and water treatment needs of the global petroleum and petrochemical industries in upstream and downstream applications.

Solid estimate revision trends in Ecolab’s Global Energy segment buoys optimism. The Zacks Consensus estimate for the Global Energy segment is pegged at $800 million, reflecting a nominal improvement of 0.4% from the third quarter.

Estimate Revision

The estimate revision trend for Ecolab looks impressive. The Zacks Consensus Estimate for revenues in the current quarter is pegged at $3.62 billion, showing year-over-year growth of 7.9%. Additionally, the Zacks Consensus Estimate for adjusted earnings in the current quarter is $1.40 per share, which reflects year-over-year growth of 12%.


For the fourth quarter, the company expects adjusted earnings per share in the band of $1.35-$1.45 per share compared with $1.25, projected in the year-ago quarter. Moreover, adjusted gross margin for the fourth quarter is expected to be 48% of net revenues.

For full year, Ecolab expects adjusted earnings per share in the range of $4.65-$4.75. The Zacks Consensus Estimate for earnings per share of the current year is pegged at $4.70.


Ecolab is a leading provider of water, hygiene and energy technologies and services that protect people and vital resources in more than 170 counties. The company's programs and services help promote food safety, maintain clean environments, optimize water and energy use to improve operational efficiencies for customers.

Recently, in collaboration with Cargill — a food, agricultural and financial service provider — Ecolab launched the Techstars Farm to Fork Accelerator. This is a program that will identify entrepreneurs and start-up companies from around the world who have innovative ideas focused on agriculture, food-related digital technology, food processing and food safety.

Thus, Ecolab is confident of improving growth trajectory in the fourth quarter.

Our quantitative model conclusively shows an earnings beat for Ecolab this quarter. This is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates.

Zacks ESP: Earnings ESP for Ecolab is +0.21%. 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 #3. A favorable Zacks Rank increases the predictive power of ESP and the company’s positive ESP makes surprise prediction feasible.

Stocks Worth a Look

Here are a few similar medical stocks worth considering as they have the right combination of elements to post an earnings beat this quarter.

Amphastar Pharmaceuticals (AMPH - Free Report) has an Earnings ESP of +264.7% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank Stocks Here.

Audro Biotech (ADRO - Free Report) has an Earnings ESP of +2.8% and a Zacks Rank #3.

The Cooper Companies (COO - Free Report) has an Earnings ESP of +0.2% and a Zacks Rank #3.

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