WASHINGTON (dpa-AFX) - Cleaning and pest-control service provider Ecolab, Inc. (ECL), which completed its $5.4 billion acquisition of water treatment company Nalco Holding Co. in December, said Thursday it will cut 500 jobs as part of restructuring and cost-cutting efforts. The company also updated its earnings outlook for the fourth quarter as well as fiscal years 2011 and 2012, citing the restructuring charges. St. Paul, Minnesota-based Ecolab said that the restructuring and cost-saving actions are expected to help enhance realization of the company's merger-related cost synergies as well as streamline its global business. The company noted that the actions will result in restructuring and other special charges in the fourth quarter of 2011, as well as fiscal years 2012 and 2013. Ecolab expects total merger-related restructuring costs over the period to be about $180 million, with other special charges of about $300 million. The restructuring is expected to be completed by the end of 2013. The company will reduce its global workforce by about 500 positions, primarily in corporate G&A, through open positions and attrition. However, none of the positions affected will be in sales or R&D. Ecolab expects to incur special charges in the fourth quarter of about $60 million after tax, or $0.25 per share, including charges related to the modification of a long-term customer agreement that was part of a previous water-related acquisition and charges related to Europe restructuring. The company now forecasts fourth-quarter adjusted earnings per share, excluding the impact of the Nalco merger, to be $0.70, a 17 percent increase over the prior year, and compared to the prior forecast of $0.69 to $0.71 per share. On average, analysts polled by Thomson Reuters expect earnings of $0.70 per share. Analysts' estimates typically exclude special items. For fiscal 2011, Ecolab now projects adjusted earnings to reach $2.54, up 14 percent from last year, and compared to the prior forecast range, excluding the Nalco merger impact, of $2.53 to $2.55 per share. Analysts expect earnings of $2.54 per share. For fiscal year 2012, Ecolab continues to expect adjusted earnings per share of about $3.00 per share, and has established a forecast range of $2.95 to $3.05. This would represent a 16 to 20 percent increase over the previous year. Analysts expect the company to earn $3.03 per share. Ecolab raised its forecast for annual synergy cost savings benefit to about $250 million from the prior $150 million objective. The company also raised its synergy cost savings forecast for 2012 to about $75 million from $35 million, noting that it will help overcome unfavorable currency movements, raw materials and pension costs. Ecolab projects 2013 charges of about $150 million. The company noted that future cost synergies actions beyond 2012 include reduction of plant and distribution center locations. The company noted that these and additional productivity as well as efficiency actions are expected to reduce the need for future position additions by approximately 1,500 over the next several years. In Thursday's regular session, ECL is trading at $60.49, down $0.05 or 0.08 percent on 180,714 shares.
Copyright RTT News/dpa-AFX
© 2012 AFX News
