Ecolab Inc.’s fourth-quarter adjusted profit rose 8% amid an uptick in industrial and institutional sales, but it fell shy of analysts’ expectations.
For the quarter ended Dec. 31, the St. Paul-based company said sales rose 2% to $3.8 billion, while net income rose 9% to $430 million, or $1.47, a share with the help of a reduced tax rate.
CEO Douglas Baker told analysts he was pleased with the fiscal year.
Ecolab said it expects new business, price hikes and cost cuts to boost results throughout 2020. It forecast that adjusted earnings will grow 9% to 12% to reach $6.33 to $6.53 a share for the year. That guidance includes a 5 cents a share hit from the effects of the coronavirus outbreak in China.
Baker said pension and currency headwinds will reduce full-year results by about 12 cents a share.
“However, we have strong underlying new-business momentum and our innovation pipeline is strong, including our multiple-year digital investments,” he said. Improving sales trends and expanded margins are expected to continue in 2020, he added.
Excluding one-time special gains, charges and discrete tax items, adjusted earnings for the fourth quarter rose 8% to $1.66 a share for the quarter. That was 3 cents shy of analysts’ estimates.
Total fourth-quarter results included a $7 million cost impact from a European health care product recall, $25 million in restructuring costs and impact from pension liabilities.
On the sales side, fourth-quarter revenue rose for Ecolab’s two largest businesses — global industrial and institutional.
Energy-unit sales, however, fell 3%.
In December, Ecolab announced that during the second quarter of 2020 it would spin off its “upstream” oil-drilling chemicals business and merge it with Texas-based Apergy Corp. as part of a complex tax-free deal. Excluding the upstream energy business, which has about $2.3 billion in sales, Ecolab’s fourth-quarter fixed-currency sales rose 3%.
Ecolab’s stock price rose less than 1% Tuesday to close at $207.68 a share.