Ecolab Inc. beat profit expectations but saw first-quarter sales and profits dip as oil chemical sales fell and negative currency exchanges pinched results, company officials announced Tuesday.
“We delivered solid underlying business growth and margin expansion in the face of sluggish global economies and a very difficult oil and gas market,” Doug Baker, CEO of the St. Paul maker of cleaning, sanitizing and oil separation chemicals, told analysts during a conference call Tuesday. “Effective new products and strong new business gains, along with our focus on excellent service delivery, drove our operating results.”
Baker upheld Ecolab’s full 2016 adjusted earnings guidance of $4.35 to $4.55 per share.
For the quarter, Ecolab reported strong sales to hotel, restaurant, school and food companies but could not overcome the 14 percent bite from negative foreign currency exchange rates or the drop in orders from oil processing firms. In addition the company’s energy business saw sales fall 15 percent, even when currency exchanges were factored in.
Baker said he expects comparative currency and energy challenges to “lessen as the year progresses.” He added that Ecolab’s institutional, industrial and other segment businesses “are expected to continue their strong performance” through the year.
During the first quarter, profits slid 1 percent to $231 million, or 77 cents a share, on revenue that fell 6 percent to $3.1 billion. Profits beat analysts’ consensus expectations by a penny per share but revenue missed expectations by $23 million.
The quarter’s results included special gains and charges of $6 million, which were down from $8 million in net charges for the same period one year ago.
Ecolab’s stock dropped 68 cents to $113.59.