Ecolab Inc.'s (ECL) fourth-quarter earnings surged 45% on
prior-year charges as well as cost cuts and strong new-account
activity at the cleaning and pest-control services company.
The company forecast first-quarter earnings of 36 cents to 40
cents a share on "modest" revenue growth. Analysts surveyed by
Thomson Reuters, on average, expected earnings of 44 cents and a 7%
revenue increase to $1.44 billion. For the year, Ecolab anticipates
a profit of $2.17 to $2.25; analysts projected $2.25.
In early trading, Ecolab shares were down 3.7% at $42.15.
Recently, the company's business has suffered amid massive
cost-cutting among corporate clients during the economic downturn.
But the new business, cost cuts and higher prices more than offset
the recession's impact in the latest quarter.
President and Chief Executive Douglas M. Baker Jr. said Ecolab
took aggressive actions to provide customers with cost-saving
solutions for their cleaning needs last year. He added, "While we
do not expect a significant rebound in our end markets in 2010, we
have seen a clear bottoming. We have moved fully onto offense."
Ecolab posted a profit of $115.8 million, or 48 cents a share,
compared with $80 million, or 33 cents per share, a year earlier.
Excluding restructuring charges and other impacts, earnings rose to
55 cents from 45 cents. In October, the company predicted 54 cents
to 57 cents.
Revenue increased 5% to $1.56 billion, matching analysts'
expectations. Revenue increased 2% on a fixed-currency basis.
Gross margin rose to 50.1% from 48.1%; the company had forecast
50% to 51%.
Revenue for Ecolab's core business, U.S. cleaning and
sanitizing, was up 4% while earnings climbed 29%. Other U.S.
revenue fell 3% while earnings jumped 14%. International revenue
rose 8% on a fixed-currency basis and income grew 13%.
Shares closed Wednesday at $43.78 and weren't active
premarket.
-By Jodi Xu, Dow Jones Newswires, jodi.xu@wsj.com;
212-416-3037