Ecolab Inc.'s (ECL) second-quarter earnings fell 2.6% on charges
and higher commodity costs, though sales rose more than
expected.
The company forecast third-quarter adjusted earnings of 73 cents
to 75 cents a share, while analysts surveyed by Thomson Reuters
currently expect 76 cents. The cleaning-products company also
backed its full-year guidance from earlier this month.
Ecolab--which provides cleaning, sanitation and pest-control
products and services--has posted improved results in recent
quarters, helped by acquisitions and strength in its U.S. cleaning
and sanitizing unit. The company has been steadily acquiring
smaller assets and earlier this month, Ecolab agreed to acquire
Nalco Holding Co. (NLC), a maker of chemicals used in water
treatment, pollution control and energy conservation, for $5.38
billion.
Ecolab reported a profit of $125.9 million, or 53 cents a share,
down from $129.3 million, or 54 cents, a year earlier. Excluding
items such as restructuring charges, earnings rose to 64 cents a
share from 56 cents, in line with a projection from earlier this
month.
Sales jumped 12% to $1.7 billion, topping the $1.65 billion
expected by analysts polled by Thomson Reuters.
Gross margin fell to 49.3% from 50.7%, reflecting a 15% rise in
costs. The company said raw material inflation peaked in North
America during the quarter and it expects Europe's raw material
costs to peak in the third quarter.
Sales for the company's U.S cleaning-and-sanitizing segment, its
largest business in the U.S. by revenue, increased 9.2%, and its
operating profit rose 3.2%. International sales rose 7.2%, while
earnings jumped 26%.
Shares closed at $50.88 and were inactive premarket.
-By Melodie Warner, Dow Jones Newswires; 212-416-2283; melodie.warner@dowjones.com