Strong sales and product price hikes helped offset rising product delivery costs, resulting in earnings that beat expectations for Ecolab.
The cleaning and sanitation chemicals maker based in St. Paul said Tuesday that first-quarter sales increased 10 percent to $3.47 billion. Profits slipped 3 percent to $247 million, or 84 cents a share. Excluding one-time items, however, adjusted earnings rose 14 percent to 91 cents a share.
That beat Wall Street expectations handily. On average, analysts had expected adjusted earnings of 88 cents a share.
New products and lower taxes and interest expenses also boosted profit gains during the quarter, the company said.
Citing accelerated price increases and improved sales across its industrial, institutional and energy divisions, Ecolab increased its adjusted earnings forecast for the year. Adjusted profits for 2018 are now expected to reach $5.30 to $5.50 a share. That's up from the prior forecast of $5.25 to $5.45.
In a statement, CEO Doug Baker noted that he was "confident" that 2018 would be a "strong year."
During the quarter, sales to food, beverage and water customers were particularly strong as were sales to industrial and institutional customers in North America, Asia and Latin America. Ecolab closed 2017 with $14 billion in revenue, and executives expect another strong year.
"We are off to a strong start for the year, as we showed continued good sales momentum in the first quarter across all segments led by new business wins, new products and pricing," Baker said. "These solid sales gains, along with cost efficiencies, offset higher delivered product costs and systems investments."
Ecolab expects pricing initiatives, lower taxes and interest, and a newly developed "comprehensive efficiency initiative" to help expand margins, Baker said.
The company will incur special charges for 2018 related to a $25 million commitment to fund the Ecolab Foundation, officials announced. That and a few other items will result in special charges of 12 to 15 cents per share.
Ecolab's stock ended Tuesday at $147.13, up $2.36 or 1.6 percent.