By Saabira Chaudhuri
Ecolab Inc.'s (ECL) first-quarter earnings surged as the company
reported lower costs, while the year-earlier period was weighed
down by one-time charges.
"While the global markets remain mixed, with continued sluggish
trends in North America and softer trends in Europe offset by
favorable markets in Asia Pacific and Latin America, we look for
improved sales growth and further double-digit earnings per share
gains over the balance of 2013 and for the full year," Chief
Executive Douglas M. Baker Jr. said.
Ecolab reported a profit of $159.6 million, or 53 cents a share,
versus a year-ago profit of $49.7 million, or 17 cents a share. The
most recent quarter included $18.5 million in restructuring charges
and $23.4 million in impacts tied to Venezuela's currency
devaluation. The year-ago quarter included $26.5 million in
restructuring charges and $73.9 million tied to the recognition of
inventory at fair value. Excluding one-time items, earnings were up
at 60 cents from 50 cents. The company in February had projected
adjusted per-share earnings of 56 cents to 60 cents.
Revenue rose 2.2% to $2.87 billion. Analysts polled by Thomson
Reuters most recently expected $2.88 billion.
Gross margin widened to 45.5% from 42.6%. Input costs fell 3%
while interest expense dropped 29%.
Ecolab agreed late last year to buy chemical maker Champion
Technologies for roughly $2.16 billion in a deal that will push the
cleaning-products company deeper into the chemical market for the
energy industry. Earlier this month, Ecolab said it would sell part
of Champion to Clariant AG (CLN.VX) under an agreement with the
U.S. Justice Department aimed at maintaining a competitive market
for chemicals used in oil and gas wells in the Gulf of Mexico.
On Tuesday, Ecolab raised its view for the year to include
expected accretion from its Champion acquisition. The company is
now expecting per-share earnings of $3.45 to $3.55 from its prior
view of adjusted per-share earnings of $3.38 to $3.48. For the
current quarter, the company forecast per-share earnings of 81
cents to 85 cents, below the 86 cents recently expected by analysts
polled by Thomson Reuters.
Minnesota-based Ecolab's traditional product lines include
disinfectants and detergents for restaurants, hospitals and other
institutions. The company expanded into water treatment chemicals
used by the energy industry and paper industry with its
$5.6-billion purchase of Nalco in 2011. Ecolab viewed the purchase
of Houston-based Champion as an extension of Nalco's energy
business.
Shares of Ecolab, closed Monday at $83.25 and were inactive in
recent premarket trading. The stock has risen 31% in the past 12
months.
Write to Saabira Chaudhuri at saabira.chaudhuri@dowjones.com
Order free Annual Report for Clariant AG
Visit http://djnweurope.ar.wilink.com/?ticker=CH0012142631 or
call +44 (0)208 391 6028
Order free Annual Report for Clariant AG
Visit http://djnweurope.ar.wilink.com/?ticker=US18047P1012 or
call +44 (0)208 391 6028
Order free Annual Report for Ecolab, Inc.
Visit http://djnweurope.ar.wilink.com/?ticker=US2788651006 or
call +44 (0)208 391 6028
Subscribe to WSJ: http://online.wsj.com?mod=djnwires