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Ecolab posts higher earnings despite sales decline
Ecolab boosts earnings despite sales decline of 5 percent
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Unlike many of its peers in the manufacturing sector, Ecolab avoided a double-digit revenue decline in the third quarter but CEO Doug Baker said Tuesday that's he's expecting a tough sales climate to continue.
"We aren't planning on any big boomerang effect next year, or big spike up in demand," Baker told analysts.
Sales at the St. Paul-based maker of cleaning and sanitizing products dropped 5 percent to $1.5 billion in the quarter as its profit rose 15 percent to $145 million.
Driven by sales growth of its health care products, Ecolab boosted its third-quarter earnings to 60 cents a share -- a 20 percent increase that was in line with analysts' expectations.
Ecolab's hand sanitizers have been popular in the fight against the H1N1 flu, and Baker said that H1N1-related products probably boosted third-quarter revenue by $10 million. He estimated that flu-related sales could increase revenue by $20 million in the fourth quarter.
In the United States, Ecolab sales slipped 1 percent in the third quarter and foreign exchange rates had a 5 percent negative effect on the company's overall sales. At local currency rates, Ecolab's sales rose 8 percent in Latin America, 2 percent in the Asia Pacific region, but declined 1 percent in Europe, the Middle East and Africa.
Ecolab on Tuesday narrowed its forecast for full-year earnings to $1.98 to $2.01 per share, a change from the $1.96 to $2.02 range released last quarter.
The company's stock closed Tuesday at $44.95 per share, down 2.1 percent.
Liz Fedor • 612-673-7709
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