Cleanser and additive chemical maker Ecolab Inc. reported a strong fourth quarter Tuesday — and expects a strong year moving forward — bypassing Wall Street's worries that the company's oil and gas chemical supply division might be slammed by plummeting oil prices.
Relieved investors sent Ecolab's stock up $1.59 a share to a close of $113.
While other industrial behemoths took a hit from sagging oil prices, Ecolab's sales for its energy chemicals division grew 11 percent during the quarter to $1.14 billion. In contrast, its non-energy industrial and institutional businesses grew 4 percent and 6 percent, respectively.
Combined, the St. Paul-based company saw earnings rise 17 percent to $335.5 million, or $1.10. Excluding one-time charges and tax items, quarterly earnings were $1.20 a share and in line with Wall Street forecasts.
Sales rose 3.3 percent to $3.7 billion amid strong gains in Latin America, increases in energy and specialty products and new product introductions.
For all of 2014, sales rose 7.7 percent to $14.3 billion, which met analysts' expectations. Annual profits rose 24 percent to $1.2 billion, or $3.93 a share. That was below the $4.18 a share expected by analysts.
The company acknowledged that lower oil prices worldwide will slow its energy segment results in 2015. But CEO Douglas Baker said, "The strength of [the unit's] recurring business model makes us confident it will be accretive to the year. At the same time, our other businesses will benefit from lower raw material costs."
On a net basis "these factors should roughly offset each other," he said.
