WASHINGTON (dpa-AFX) - Cleaning and pest-control service provider Ecolab, Inc. (ECL) reported Tuesday a profit for the first quarter that dropped 47 percent from last year, hurt by restructuring charges.
However, adjusted earnings per share grew and topped analysts' expectations, reflecting sales growth across all segments and regions. The company also provided earnings forecast for the second quarter, just below Street view, and maintained its earnings guidance for the full-year 2012.
The company noted that strong results were led by its global energy and Latin America operations, as well as the solid results from global water, worldwide Food & Beverage and U.S. Institutional businesses.
'The 'new' Ecolab is off to an excellent start. Our team did a great job successfully managing the business and simultaneously made great progress against our integration and synergy objectives, exceeding both. Most impressively, our team also delivered record new business gains,' Chairman and CEO Douglas Baker, Jr. said in a statement.
The St. Paul, Minnesota-based company reported net income of $49.7 million or $0.17 per share for the first quarter, down from $93.6 million or $0.40 per share in the prior-year quarter.
The results for the latest quarter reflect the previously announced charges including the Nalco inventory step-up, the early retirement of debt and other integration and restructuring charges.
Excluding special items, adjusted net income for the quarter increased to $150.3 million or $0.50 per share from $107.0 million or $0.45 per share in the year-ago quarter.
On average, 15 analysts polled by Thomson Reuters expected the company to earn $0.48 per share for the first quarter. Analysts' estimate typically excludes special items.
Net sales for the quarter surged 85 percent to $2.81 billion from $1.52 billion in the same quarter last year, and topped twelve Wall Street analysts' consensus estimate of 2.72 billion. When measured in fixed currencies and adjusted for acquisitions, sales grew only 9 percent from last year.
Net sales reflect the inclusion of the Nalco merger, which closed December 1, 2011.
'Sales grew in every segment and in every region. Our new Global Energy business led the way with a truly standout quarter, and we also saw solid results in our Global Water, U.S. Institutional and worldwide Food & Beverage businesses. Regionally, both North America and Latin America strengthened compared with recent trends,' Baker, Jr. added.
Ecolab's U.S. cleaning & sanitizing sales grew 4 percent to $709 million, and U.S. other services sales increased 4 percent to $111 million from last year. Sales for Ecolab's international operations, measured at fixed currency rates, grew 3 percent to $733 million from the year-ago quarter.
Among its acquired businesses, global water sales, when measured at fixed currency rates, grew 6 percent to $498 million, global paper sales, when measured at fixed currency rates, rose 2 percent to $199 million, and global energy sales, when measured at fixed currency rates, increased 29 percent to $537 million from last year.
Interest expense for the quarter soared to $86.1 million from $13.5 million in the year-ago quarter.
Looking ahead to the second quarter, Ecolab anticipates adjusted earnings in a range of $0.69 to $0.72 per share. Analysts expect the company to report earnings of $0.73 per share for the quarter.
For fiscal 2012, the company continues to expect adjusted earnings in a range of $2.95 to $3.05 per share. Street is currently looking for full-year 2012 earnings of $3.03 per share.
In Tuesday's regular trading session, ECL is currently trading at $63.22, down $0.47 or 0.74% on a volume of 19,764 shares.
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