Ecolab’s fourth-quarter profit surged 24 percent, the company said Friday, driven by the dramatic growth of its recently acquired oil and gas services unit.
The St. Paul-based provider of industrial and commercial cleaning and other environmental services said it earned $287 million, or 93 cents a share, in the last three months of 2013.
Excluding integration costs and other one-time items, adjusted earnings were $1.04 a share, missing analysts’ consensus expectations by a penny.
Still, investor sentiment was lifted by executives’ forecast for full year 2014 that exceeded expectation. On a down day for the broader market, Ecolab shares rose 32 cents, or 0.31 percent, to $102.19 Friday.
Overall revenue rose 17 percent to $3.56 billion, shaped mostly by a 78 percent jump at Ecolab’s energy services division, to $1.06 billion.
Sales rose just 4 percent for Ecolab’s largest business, which provides cleaning chemicals and services for water filtration, food and beverage, paper and other plants. Sales also rose just 4 percent for Ecolab’s second-largest business, which caters to restaurants, hotels and offices.
“Clearly, the fourth quarter was a good end to a very good year. We left the year with solid top-line momentum,” CEO Douglas Baker told analysts during a conference call. “We delivered solid organic sales growth in a tough global economy … [And] we made terrific progress integrating our Nalco and Champion [energy services] acquisitions, outpacing our own timelines and strengthening our combined offerings.”
He noted that the quarter was particularly helped by Champion, the oil additives and treatment firm Ecolab bought last April. He said Ecolab was on track with savings goals related to integrating Nalco and Champion, including cutting duplicative operations and cross-selling products. The company expects to save $150 million a year by 2015 and has already made “significant” progress, officials said.
Equity analyst Nate Brockman with William Blair & Co. said Ecolab had “done a great job getting the synergies with Nalco and Champion.”
Baker said Ecolab expects “2014 to be another very good year.” The company forecast full-year adjusted earnings to rise 16 to 19 percent to $4.10 to $4.20 per share. That estimate, which excludes one-time gains, restructuring charges, integration costs and tax changes, is significantly higher than the $3.55 per share expected by analysts.