Solid orders from energy customers pushed Ecolab Inc. to report strong third-quarter earnings Tuesday that beat analysts' estimates.
The St. Paul-based maker of cleaning and sanitizing chemicals and oil industry additives, saw third-quarter sales rise 6 percent to $3.69 billion. Excluding one-time items, earnings rose 16 percent to $368 million, or $1.21 a share, a penny above analysts' consensus estimates.
Executives raised the bottom of their full-year earnings guidance to a range of $4.16 to $4.20 a share, up from $4.14 to $4.20.
For the quarter, officials cited strong energy and specialty orders and "strong gains in Latin America and good results in North America and Asia-Pacific." Europe's institutional business proved weak during the quarter.
In a statement, Chief Executive Doug Baker said, "We are pleased with our third quarter as we delivered strong top-line results despite challenging global economic conditions. Acquisition-adjusted sales growth has improved sequentially each quarter this year."
Ecolab, best known for providing cleaning and disinfecting chemicals and services to hotels, national restaurant chains, hospitals and commercial businesses, pushed more heavily into the energy industry with big acquisitions in 2011 and 2013. Its energy segment's sales grew 14 percent in the third quarter to $1.09 billion. "Energy is on track to deliver double digit growth for the year," Baker told analysts during a conference call Tuesday.
Ecolab's industrial business grew 3 percent during the quarter to $1.25 billion, and its institutional business rose 4 percent to $1.13 billion in sales.
The dramatic differences between energy's growth and the tepid growth of Ecolab's traditional cleanser businesses prompted questions from some analysts Tuesday. Baker said Ecolab has "taken a number of steps to get that business right and focused," he said. Separately, Ecolab has closed some mining and paper plants that were dragging down profits. "So the good news is we think we are near the bottom" of that restructuring," he said.
S&P equity analyst Christopher Muir said in a research note Ecolab's stock should reach $120 a share.
The stock closed Tuesday at $110.61, down 3 cents.
Dee DePass • 612-673-7725
